The world’s largest steelmaker ArcelorMittal and Japanese steel major Nippon Steel & Sumitomo Metal Corporation (NSSMC) formed a joint venture to acquire the assets of India’s debt-laden Essar Steel, the Luxembourg- based firm said on Friday. The Lakshmi Niwas Mittalowned conglomerate’s Indian arm, ArcelorMittal India, had on February 12 submitted a resolution plan for Essar Steel outlining the intention to have NSSMC formally join its bid for Essar Steel.
“Should the submitted Resolution Plan be selected and formally accepted by India’s National Company Law Tribunal, ArcelorMittal and NSSMC would jointly acquire and manage Essar Steel,” the ArcelorMittal release read. The resolution plan includes a turnaround strategy to restore Essar Steel’s fortunes, enabling it to participate in the anticipated steel demand growth in India. “Partnering with NSSMC for Essar Steel was always our intention and adds further strength to our offer.
Combining our experience and expertise creates a powerful partnership that has a proven track record - our rich history of positive collaboration dates back more than 20 years with three joint ventures in the US,” ArcelorMittal Chairman and CEO Lakshmi Mittal said. He added the two companies can jointly support a rapid turnaround in Essar’s performance, enabling it to increase production, product capabilities and “make a meaningful contribution to the future growth of India’s manufacturing sector and the development of its economy”.
ArcelorMittal and NSSMC have operated in Indiana, USA, under joint venture agreements since 1987. In 2014, ArcelorMittal partnered with NSSMC on the acquisition of AM/NS Calvert, a stateof- the-art downstream finishing facility in Alabama, USA. The facility, which opened in 2010 and has a capacity of 5.3 million tonnes, was the largest newly-constructed steel facility in the US in 40 years but had failed to reach its potential. A major investment programme has been undertaken following the acquisition. The programme focused on improving the facility’s finishing lines to enable the production of higher-added value steel products.