On October 18, 2024, JSquare Electrical Steel Nashik Private Limited, a wholly owned subsidiary of the joint venture JSW JFE Electrical Steel Private Limited, announced a significant acquisition. The company has entered into a share purchase agreement to acquire 100% equity interest in thyssenkrupp Electrical Steel India Private Limited for a total consideration of INR 4,051.40 crore, subject to closing adjustments. This move marks a pivotal step in enhancing JSW and JFE's footprint in the electrical steel market in India.
Thyssenkrupp Electrical Steel India, based in Nashik, Maharashtra, is recognized as one of the pioneers in manufacturing grain-oriented electrical steel in the country. This acquisition is poised to grant JSW and JFE immediate access to advanced technology and expertise, aligning seamlessly with their strategy to enhance their value-added product portfolio. By leveraging tkES India's existing capabilities, the consortium can accelerate its efforts in the growing electrical steel market.
The joint venture, established between JSW Steel Limited and Japan's JFE Steel Corporation in February 2024, aims to create an integrated manufacturing system for GOES in India. This collaboration signifies a strategic alignment of resources and knowledge, with J2ES expected to commence full production by 2027. The acquisition of tkES India will facilitate a swift transition to an integrated system for manufacturing and sales, allowing the partners to cater to both domestic and international markets effectively.
Mr. Jayant Acharya, Joint Managing Director and CEO of JSW Steel, emphasized the rapidly expanding market for GOES. He noted that this acquisition not only enables the consortium to manufacture high-quality electrical steel domestically but also supports the broader initiative of import substitution, contributing to India's goal of self-reliance. By establishing a local manufacturing presence, JSW and JFE aim to reduce dependency on foreign imports, enhancing the resilience of the supply chain.
The transaction will also involve the licensing and transfer of an associated technology package from the thyssenkrupp group, further strengthening the capabilities of JSW and JFE in producing GOES. This technology transfer is expected to play a crucial role in ensuring the quality and efficiency of production, allowing the joint venture to meet the evolving needs of customers in both India and abroad.
However, the closing of the transaction is contingent upon obtaining necessary regulatory approvals and fulfilling customary conditions as outlined in the transaction agreements. This procedural step is standard in large-scale acquisitions and underscores the importance of compliance with legal and regulatory frameworks.
