Date | Aug 18, 2016:
JSW Steel Ltd., the flagship company of JSW Group, has signed an agreement to acquire Praxair India Pvt. Ltd.’s entire 74% stake in their joint venture JSW Praxair Oxygen Pvt. Ltd. (JPOPL) for INR 240 crore ($36 million) in cash. The value of the company now stands at INR 324 crore and it has become a wholly owned subsidiary of JSW Steel, the 2nd largest steel maker in the country.
The financial and legal due diligence on behalf of JSW Steel was undertaken by Deloitte Touche Tohmatsu India LLP and Bharucha & Partners, Advocates and Solicitors respectively.
Praxair is the Indian arm of the US-based Praxair Inc., which forayed into India in 1995 through the joint venture with JSW.
JPOPL is engaged in the business of production and sale of industrial gases such as oxygen, nitrogen and argon. It has set up two air separation plants, each with a daily capacity of 2500 tonnes at Toranagallu in Bellary district of Karnataka. JSW Steel sources industrial gases from JPOPL and other suppliers at prices based on long term contracts. This acquisition will benefit JSW Steel with backward integration.
The JSW Group’s foray into steel manufacturing dates back to 1982, when it had set up the Jindal Iron and Steel Company with its first steel plant at Vasind near Mumbai. The next two decades witnessed significant expansion and several acquisitions, following the merger of Jindal Iron and Steel Co (JISCO) and Jindal Vijayanagar Steel Ltd (JVSL) in 2005. Today, JSW Steel has plants in six locations in India — Vijayanagar in Karnataka, Salem in Tamil Nadu, and Tarapur, Vasind, Kalmeshwar and Dolvi in Maharashtra. It also operates globally through a plate and pipe mill in the US. The company had earlier acquired mining assets in Chile, USA and Mozambique to securitise resources.
In 2014, JSW Steel had agreed to buy Welspun Energy Ltd’s entire stake in sponge iron firm Welspun Maxsteel Limited for INR 1,000 crore and also, had acquired a 50% stake in Vallabh Tinplate Pvt Ltd for INR 46 crore to enter the tinplate business.
The JSW Group has been on an acquisition spree for the past couple of years in steel, power and cement sectors to consolidate its position.
(Source: http://www.dealcurry.com/)