March 2, 2018
Nippon Steel & Sumitomo Metal Corporation
Agreement between NSSMC and ArcelorMittal regarding joint acquisition
of Essar Steel India Limited and establishment of a joint venture in India
On March 2, 2018, Nippon Steel & Sumitomo Metal Corporation (President:
Kosei Shindo, “NSSMC”) and ArcelorMittal (Headquartered in Luxembourg,
CEO: Lakshmi Mittal, “AM”) entered into an agreement on basic terms and
conditions to jointly acquire and manage Essar Steel India Limited (“ESIL”),
which is currently undergoing resolution proceedings under the Indian
Insolvency and Bankruptcy Code, through a joint venture to be formed by
NSSMC and AM. NSSMC will proceed with AM to form the joint venture and
acquire ESIL subject to the approval of the regulatory authorities.
India is one of the most promising steel markets in the world, with significant
growth potential in the medium- and long-term and where domestically produced
steel products have a superior position. NSSMC has been steadily expanding
local production in India and targeting sectors advantageous to NSSMC’s
technological superiority. Meanwhile, NSSMC has also been seeking
opportunities to engage in integrated steel production in India to steadily capture
the growing demand for steel products, which is expected to increase along with
the development of domestic infrastructure.
ESIL is one of the major steel companies in India, having a fully integrated steel
production system located in the west coast region of India. ESIL manufactures
flat steel products, plates and pipes, which are sold through its extensive
domestic sales channels, and owns an iron ore mine in the east part of India.
NSSMC and AM have produced successful results and established a strong
relationship through their global strategic alliance, including the joint
management of I/N Tek (cold-rolled steel products) and I/N Kote (coated steel
products) in Indiana, USA, as well as AM/NS Calvert (hot-rolled, cold-rolled, and
coated steel products) in Alabama, USA. Based on the success of the
relationship between NSSMC and AM, as well as AM’s extensive track record of
rebuilding many companies and substantial market knowledge of India, NSSMC
believes that, by bringing together the strengths of both companies, NSSMC and
AM will be able to successfully turn around ESIL and transform it into a
competitive steel business.
One of the major initiatives of NSSMC’s 2020 Mid-Term Management Plan is the
further enhancement and development of its global business. Through the
formation of the joint venture and the joint acquisition of ESIL, NSSMC will
reinforce its global supply network by maximizing the utilization of its product
technology and cost competitiveness, and enhance its ability to meet the needs
of various customers. NSSMC will continue to advance toward becoming the
“Best Steelmaker with World-Leading Capabilities”.
ESIL’s outline (Source : ESIL Annual Report 2016-2017)
1) Corporate name : Essar Steel India Limited
2) Establishment : 1976
3) Capital : 31.5 billion INR
4) CEO : Jatinder Mehra
5) Main production base : Hazira Steelworks
(Gujarat State in the west coast region of India)
6) Production capacity : 10 million tons (nominal capacity)
(Integrated steel mill)
7) Product types : hot-rolled, cold-rolled and galvanized steel products
steel plates, steel pipes
8) Number of employees : 3,988 (as of the end of March 2017)
9) Revenue (Standalone) *1 : 219.6 billion INR (FY 2016)
*1：On October 30, 2018, "9) Revenue (Consolidated)" was corrected to "9) Revenue (Standalone)"
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