BHUBANESWAR: JSW Steel has signed a deal with Algeria’s Cevital Group to buy Italy’s second largest steel plant Aferpi, formerly known as Lucchini, and two other facilities for a cash consideration of 55 million euros (Rs 441 crore).The deal includes 100 per cent share purchase each of Aferpi and Piombino Logistics (PL) and 69.27 per cent share capital of GSI Lucchini.
The acquisition, which will mark a comeback by JSW Steel, is expected to be signed on Saturday, said sources close to the development.JSW Steel had bid out for Lucchini, but lost out to Cevital in 2014.
Cevital, the largest privately-held group in Algeria, had bought Lucchini in 2014 and renamed it Acciaierie e Ferriere di Piombino (Aferpi). Lucchini was originally owned by Russia’s Severstal and was declared insolvent in 2012.
The deal will help JSW Steel to gain presence in the European market and to expand its reach in the specialised steel market, especially in the automobile sector. It fits their plans as its group company, JSW Energy, is gearing up for electric car production in India. Plans are to roll out the first electric vehicle by 2020.
A bridgehead in Europe, one of the largest electric car markets, is likely to enable the group to localise the manufacture of components much faster.Senior officials of JSW are in Italy and the agreement document was signed at Italy’s Ministry of Economic Development.
Aferpi has a capacity to produce 2.5 million tonnes of steel every year and makes a wide range of special steel for rails, wire rods and bars for railway, automotive and earth-moving vehicles, among others.
Presently, it is working on projects that involve production of one million tonne of long steel products, revamping of wire rod and bar mills, and installation of one electric car furnace of 1 million tonnes capacity with two continuous casting machines.