JSW Steel Will Acquire Thyssenkrupp Electrical Steel India Jointly With Japan’s JFE Steel Corporation

JSW Steel and Japan’s JFE Steel Corporation are teaming up to acquire 100% of Thyssenkrupp Electrical Steel India (tkES India) in a Rs.4,051.4 crore deal. It was announced recently and will be executed through a 50:50 joint venture, with both companies aiming to boost their footprint in the electrical steel sector. The acquisition also includes securing important tech from Thyssenkrupp to work on the operations.

What’s the Strategy?

JSW Steel is working on expanding its portfolio of value-added steel products, and this acquisition fits perfectly into that game plan. tkES India specializes in grain-oriented electrical steel (GOES), which is crucial for making energy-efficient transformers and high-performance generators. With the demand for GOES on the rise, this deal helps the joint venture get a stronger grip on both the Indian and global markets.

Financials & What’s in it for JSW?

Founded in 2000, tkES India generated Rs.1,271 crore in revenue for FY24. By taking over this company, JSW and JFE will be able to establish a full production and sales ecosystem for GOES, using tkES India’s Nashik facility. This plant already supplies major Indian utilities like the Power Grid Corporation of India and exports globally, giving the JV immediate access to a well-established network. The transaction is expected to wrap up within eight months, pending approval from the Competition Commission of India.

JSW’s Bigger Vision

Earlier this year, JSW and JFE had announced a Rs.5,500 crore investment to produce GOES in India, with production expected to start things off by 2027. However, this acquisition will fast-track their plans, giving them an immediate edge in the market while pushing the “Make in India” narrative forward by reducing reliance on imports.

JSW Steel Limited’s stock has seen a good performance, up 12.23% year to date and an impressive 31.51% over the past year. Currently trading at Rs.984.95, the stock is down 0.77% today.

Conclusion: In conclusion, this acquisition is more than just another deal for JSW Steel and JFE, it’s about gaining access to a growing market and strengthening their position in the global supply chain for grain-oriented electrical steel.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.