Business

Tata Steel To Acquire Usha Martin Limited's Steel Business For Rs 4,700 Crore

JAVED SAIFI | 0
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| September 23 , 2018 , 12:14 IST

After acquiring a major stake of 72.65 per cent at a cost of around Rs 35,200 crore in the Bhushan steel, Tata Group Subsidiary company Tata steel to acquire the steel business of Usha Martin Limited (UML) as the company announced on Saturday.

The deal between both the companies is expected to settle in 6-9 months at a cost of acquisition between Rs 4,300-4,700 crore subject to various transaction adjustments.

Announcing the acquisition Tata Steel in a statement said, " The company has executed definitive agreements for the acquisition of the steel business of Usha Martin Limited (‘UML’) through a slump sale on a going concern basis."

"The closing of the acquisition is subject to fulfilment of various conditions under the agreements. At the closing, Tata Steel or any of its subsidiaries or affiliates may carry out this acquisition," the statement reads.

Also Read: Tata Steel Net Profit Doubles To Rs 1,934: Q1 Results 

According to reports, UML in a stock exchange filing said that sale of steel business to Tata steel will help the company to reduce its debts.

UML's steel business comprises of a specialized ~1.0 mtpa alloy based manufacturing capacity in long products segment based in Jamshedpur, a producing iron-ore mine, a coal mine under development and captive power plants.

"The acquisition is part of the overall strategy to build capability in long products and expand product offerings including high-value-added products," Tata Steel said.

Tata Steel is a global leader of steel business across the country with an annual crude steel capacity of 27.5 million tonnes per annum (MTPA) as of March 31, 2018.

It has a widespread network of its plants with operations in 26 countries and a commercial presence in over 50 countries.