JFE Steel Corporation has acquired 15% of India’s JSW Steel for INR 48bn ($1.02bn).
The deal will help JFE increase its share of the ever-growing Indian steel market and is part of its strategy to increase its presence there.
JFE said that it would provide JSW with technology to make automotive steel as well as consider involvement in an integrated mill project in the state of West Bengal that had been put on hold due to funding problems.
JFE Steel also will provide JSW with technical assistance for the production of automotive steel and the implementation of operational improvements at JSW’s Vijayanagar Works.
JFE will provide technology for the production of hot-rolled coils and cold-rolled coils for automotive use, and the two companies will jointly provide automotive customers with services including application engineering and product development.
Increased production of automobiles in India is creating greater needs for local materials. The two said the deal will position JSW as a strategic base for the production of automotive steel, ultimately to increase sales in India.
The operational improvements at the Vijayanagar Works Include improving energy efficiency, environmental management, improvement of production process quality and yield, production capacity analysis and indices benchmarking.
JFE and JSW had agreed in November to consider taking stakes in each other as part of an alliance that would include making auto-grade steel in India and a move towards joint sourcing of raw materials.