Bhubaneswar: ArcelorMittal Nippon Steel India (AM/NS India) – a joint venture between ArcelorMittal and Nippon Steel, has announced that it has reached definitive agreement to acquire port, power and other logistics and infrastructure assets in India from the Essar Group for a net value of approximately US$2.4 billion.
The transaction is expected to be funded only by AM/NS India. The assets are either captive, including port assets in Gujarat, Andhra Pradesh and Odisha, or allied to AM/NS India’s steelmaking and will strengthen the strategic integration of the Company’s manufacturing and logistics chain.
Full ownership of the strategically located port assets in Gujarat, Visakhapatnam and Paradip will ensure seamless connectivity and supply chain security for movement of raw materials and finished goods between AM/NS India’s manufacturing facilities in western, eastern and southern India, as well as for exports.
Acquisition of the power and transmission assets will ensure cost-effective, long-term power supply and energy efficiency at Hazira.
The assets being acquired are cash accruing and will generate operational synergies immediately upon completion of the transaction. AM/NS India will be able to realise further synergies from rising throughput at the port assets as a result of the company’s planned expansion of steel production capacity.
Transaction closing is subject to the completion of certain corporate and regulatory approvals. Key assets being acquired include:
The company will acquire a 25 MTPA jetty at the all-weather, deep draft bulk port terminal at Hazira, Gujarat and a 16 MTPA all-weather, deep draft terminal at Visakhapatnam, Andhra Pradesh along with an integrated conveyor connected to AM/NS India’s 8 MTPA iron ore pellet plant in the port city.
It will also acquire a 12 MTPA deep-water jetty at Paradip, Odisha along with a dedicated conveyor that handles 100 per cent of pellet shipments from AM/NS India’s Paradip pellet plant.
On power sector, the steel maker will acquire a 270 MW multi-fuel power plant at Hazira, which has a long-term power purchase agreement with AM/NS India’s adjacent steelmaking facility and another 515 MW gas-based power plant, along with allied land that can be utilised for AM/NS India’s expansion plans at Hazira.
Besides, a 100 KM Gandhar – Hazira transmission line, connecting AM/NS India’s steelmaking complex with the central electricity grid, will also be acquired by AMNS.