Tata Steel Signs Agreement to Acquire Usha Martin's Specialty Steel Business

SEATTLE (Scrap Monster): Tata Steel Limited has announced execution of definitive agreement towards acquisition of the steel business owned by Usha Martin Limited for a cash consideration of INR 4,300 to INR 4,700 crore. The acquisition is part of the company’s strategy to expand product offerings by building capability in long products.

The transaction relates to proposed acquisition of steel business that comprises of the specialized 1 mtpa alloy based integrated steel manufacturing capacity based in Jamshedpur, an iron-ore mine under production, a coal mine under development and captive power plants. The acquired assets align very well with Tata Steel’s main line of business, sources noted.

The closing of the acquisition deal is subject to fulfillment of various conditions under the agreement and necessary regulatory approvals including those from Competition Commission of India (CCI) and from other government agencies with regards to transfer of immovable property, iron-ore mine and coal mine. The company expects the acquisition to get completed within 6-9 months.

Rohit Nanda, Chief Financial Officer, Usha Martin Limited, noted that all employess pertaining to steel business will be transferred as part of the deal. The entire amount from the sale will be used to repay the debt, he added. It must be noted that the company had reported a total debt of INR 4,600 crore as on 31 March, 2018.

This is considered as Tata Steel’s first major acquisition outside the NCLT process. The acquisition is expected to enhance the company’s portfolio and consolidate its presence in the high-end automotive and engineering segment.