TOKYO ― JFE Steel Corporation, following extensive deliberations with JSW Steel Limited since signing a strategic collaboration agreement on November 19, 2009, announced today that as the first concrete step of a new strategic alliance, they have signed agreements for JFE Steel to take an equity position in JSW Steel and to provide the Indian steelmaker with technical assistance. JFE Steel, through its partnership with JSW Steel, now expects to participate on a full scale in the emerging market of India.
JFE Steel will acquire a stake in JSW Steel by subscribing to a preferential allotment at a cost of 48 billion Indian rupees. The company plans to acquire 14.99% voting rights, so it will make additional investments if the forthcoming acquisition does not reach this figure due to reasons including but not limited to possible fluctuations in JSW Steel’s share price. JSW Steel has established a solid business base in India through strategies to expand capacity and raise the company’s rate of captive iron ore mines for improved growth and profitability. Based on JFE Steel’s equity participation, the two companies plan to cooperate in a variety of areas, including JSW Steel’s envisioned West Bengal steel plant project.
JFE Steel also will provide JSW Steel with technical assistance for the production of automotive steel and the implementation of operational improvements at JSW Steel’s Vijayanagar Works. Agreements have been newly executed, as follows.
Through these newly announced agreements, JFE Steel looks forward to deepening its collaboration with JSW Steel to establish a solid base for production and sales and thereby grow its market in India.
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For further information, please contact:
Public Relations Sec., General Administration Dept.
JFE Steel Corporation