CCI Greenlights Major Steel Industry Merger
The Competition Commission of India (CCI) has given the green light for a significant merger involving several key players in the steel industry. The approved combination encompasses the transfer of Bhushan Power and Steel Limited’s (BPSL) steel business to JSW Sambalpur Steel Limited, alongside a strategic stake acquisition by JFE Steel Corporation in JSW Kalinga Steel Ltd.
This move involves a two-part transaction. Firstly, BPSL will transfer its steel business operations to JSW Sambalpur through a slump sale. Secondly, JFE Steel will acquire a 50% stake in JSW Kalinga, which will also translate into a 50% indirect stake in JSW Sambalpur. Following this transaction, JSW Kalinga and JSW Sambalpur are set to operate as a joint venture, equally owned by JFE and JSW Steel Limited.
Details of the Companies Involved
JFE Steel is a prominent entity within the JFE Group, which comprises various operating companies, including JFE Steel, JFE Engineering Corporation, and JFE Shoji Corp. On the other hand, JSW Kalinga Steel is a wholly owned subsidiary of Piombino Steel Limited, which operates under the umbrella of JSW Steel Limited. Notably, JSW Kalinga is yet to begin its commercial operations.
JSW Sambalpur, another subsidiary of JSW Kalinga, will own the target business after the completion of the proposed transaction. Similar to its counterpart, JSW Sambalpur is also at the start of its operational journey.
About Bhushan Power and Steel Limited
BPSL, the incumbent owner of the target business, is a publicly listed company engaged in comprehensive steel manufacturing, including the downstream processing of finished steel products. Currently, BPSL is an indirect subsidiary of JSW Steel, controlled through PSL.
The CCI’s decision represents a significant development in the Indian steel sector, as it consolidates operations and increases the stakes of established players within the industry. A detailed order from the commission regarding this combination will be issued shortly.
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