JFE Holdings of Japan Acquires 50% Stake in Bhushan Steel Business
Japan’s JFE Steel Corporation has announced plans to acquire a 50% stake in Bhushan Power & Steel’s steel business for ₹15,750 crore, marking a significant move in India’s metal industry. This acquisition follows Bhushan Power’s purchase by JSW Steel in 2021 for ₹19,350 crore during its bankruptcy proceedings. JFE Steel, a long-time partner of JSW Steel, aims to enhance its presence in the Indian market through this strategic investment.
Details of the Acquisition
JSW Steel will facilitate the transfer of Bhushan Power’s integrated steel facility located in Odisha to a newly formed entity, JSW Sambalpur Steel, through a slump sale valued at ₹24,483 crore. A slump sale allows for the transfer of an entire business without detailing individual asset values. Following this transfer, Bhushan Power will retain its cement grinding unit in Odisha. JFE Steel’s investment will occur in two phases, with an initial ₹7,875 crore injected into JSW Kalinga, which wholly owns JSW Sambalpur. Both JFE and JSW Steel will have the authority to appoint two directors each to the board of JSW Kalinga.
Since JSW Steel acquired Bhushan Power, the company has successfully revitalized the previously struggling unit. Once a 2.8-million-ton facility, Bhushan Power now boasts a capacity of 4.5 million tons and has become profitable, employing around 25,000 individuals. In the fiscal year 2025, the steel business of Bhushan Power reported revenues of ₹21,440 crore, showcasing a remarkable turnaround.
Future Plans and Growth Potential
The deal, pending regulatory approvals, is expected to finalize in the latter half of next year. JFE Steel and JSW Steel have ambitious plans to scale up production at JSW Kalinga to 10 million tons, with the necessary land already secured for this expansion. This strategic partnership is anticipated to bolster JSW Steel’s financial standing and support its growth initiatives. The acquisition will also enable JFE Steel to deepen its involvement in the Indian steel market, which is poised for further development.
In a related move, JSW Steel has announced plans to merge Piombino Steel, the current owner of Bhushan Power, into its operations. This merger is projected to increase the Jindal family’s stake in JSW Steel from 45% to 47%, further consolidating their influence in the company.
Statements from Leadership
Masayuki Hirose, President and CEO of JFE Steel Corporation, expressed optimism about the partnership. He highlighted the long-standing collaboration with JSW Steel since 2009, which has included various joint ventures and technology licensing agreements. Hirose emphasized that this new phase of their relationship will leverage technological strengths to enhance the integrated steel plant’s operations in India. He believes that this collaboration will not only benefit both companies but also contribute significantly to the growth of the Indian steel industry.
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