Tata Steel signs agreement to acquire steel business of Usha Martin

Tata Steel Limited announced that it has entered into a definitive agreement to acquire the steel business owned by Usha Martin Limited. The acquisition is part of the company's strategy to expand its range of rolled metal products.

The deal relates to the acquisition of the steel business, which includes a dedicated integrated steel line with a capacity of 1 million tonnes per annum based on Jamshedpur, mined iron ore, a coal mine and non-operational power plants. The sources noted that the acquired assets fit very well with Tata Steel's core business.

The closing of the acquisition is subject to various contractual conditions and required regulatory approvals, including the Competition Commission of India (CCI) and other government agencies in relation to the transfer of real estate, iron ore and coal mine. The company expects the acquisition to be completed within 6-9 months.

Rohit Nanda, Chief Financial Officer of Usha Martin Limited, noted that all labor relations related to the metallurgical business will be transferred as part of the deal. He added that the entire amount from the sale will be used to pay off the debt. It should be noted that the company reported a total debt of Rs 4,600 as of March 31, 2018.

This is considered Tata Steel's first major acquisition outside of the NCLT process. The deal is expected to improve the company's portfolio and consolidate its presence in the high-end automotive and utility segment.