- The steel maker’s $5.9 billion prolonged bid to acquire Essar Steel has been mired in legal issues for months.
- The delay is hurting SAIL’s plan to foray into a fast growing & high premium market where other private steel majors have made inroads already.
ArcelorMittal S.A. (ArcelorMittal), an Indian multinational steel manufacturing firm, is reportedly experiencing difficulties in forming a planned JV with the nation’s state-owned steel production company, Steel Authority of India (SAIL), due to its prolonged bid to acquire debt-ridden Essar Steel.
Reports cite, the world’s largest steelmaker’s $5.9 billion (INR 42,000 crores) Essar Steel acquisition bid has been mired in legal issues for months now, which is responsible for delaying the planned Joint Venture (JV).
According to a report, the delay is significantly hurting SAIL’s plan to foray into a rapidly growing and high premium market where other major Indian private steel makers, namely JSW Steel Ltd. and Tata Steel, have made sizable inroads already. A massive chunk of the nation’s automotive steel demand is presently being met by imports from Japan & South Korea. The two private firms of JSW Steel Ltd. and Tata Steel are both pushing for obtaining a portion of the overall automotive steel market, with annual demands rising by 10%.
India’s Union Minister of Steel, Chaudhary Birender Singh stated that both firms are ready to ink the definitive agreements, however, ArcelorMittal is still busy with its long-drawn Essar Steel acquisition. Singh further stated that the plant would take a couple of years to be completely built.
The Chairman of SAIL, Anil Kumar Chaudhary stated that both entities are committed to the deal and want to make the definitive agreements. Chaudhary further added that there are no issues as of now, but ArcelorMittal team is slightly preoccupied in the Essar Steel deal.
According to reports, the delay comes when the nation’s steel ministry has been pressuring automobile manufacturers in India to utilize locally-made steel and also has refused to backtrack on the tough import rules introduced in August.