JFE buys 10% stake in JSW Steel

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JFE buys 10% stake in JSW Steel

JFE Holdings will acquire 10% stake in India's JSW Steel for about Rs 1,560-2,600 crore.

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Japanese steelmaker JFE Holdings will acquire 10% stake in India's JSW Steel for about 30 to 40 billion yen (Rs 1,560-2,600 crore).

The Japanese steelmaker aims to build a supply base for Japanese carmakers such as Toyota Motor Corp and Nissan Motor Co, which plan to start manufacturing in India.

Addressing a press conference, the Vice-Chairman and Managing Director of JSW Steel, Sajjan Jindal, said that automotive steel was the core area of collaboration with JFE. "This collaboration opens new vistas for our massive expansion projects. It is an important milestone in JSW's mission of moving up the value chain in steel production."

Further, he said, "We target to achieve a capacity of 32 million tonne per annum by 2020." The quantum of mutual shareholding was yet to be decided, he said, adding, "We are also discussing collaboration on West Bengal project."

President and CEO of JFE Holdings Hajime Bada said, "This collaboration agreement provides an ideal platform for both the steel companies to come together and leverage each others strength to their mutual benefit. JFE is aiming to secure a local production base to serve customers in the high-growth Indian market. We see significant synergies with JSW Steel."

However, he added that the quantum of investment in India was still undecided.