Indo-Japanese group buys thyssenkrupp's Indian steel business for $477m
NEW DELHI, October 19, 2024
thyssenkrupp, a global industrial engineering and steel production multinational conglomerate, has announced that it has sold its electrical steel business in India to an Indo-Japanese consortium for €440 million ($477 million).
The consortium comprises leading Indian steel manufacturer JSW Steel (part of the JSW Group) and top Japanese steel company JFE Steel Corporation.
thyssenkrupp Electrical Steel is one of the leading manufacturers of grain-oriented electrical steel. This soft magnetic material is used wherever electrical energy is efficiently converted, transported and used, for example in transformers and large high-performance generators.
These aggregates play a key role in the increasingly decentralized energy supply through renewable energies. thyssenkrupp Electrical Steel currently operates sites in Gelsenkirchen in Germany and Isbergues in France.
The key Indian business - thyssenkrupp Electrical Steel India Private Limited - is a part of the Electrical Steel business unit of the German industrial giant's steel division. The main site of thyssenkrupp Electrical Steel India is located in Nashik, around 150km from the Indian business metropolis of Mumbai.
The German steel industrial conglomerate said the sale of the Indian company was taking place for market-strategic reasons.
"The supply of raw materials from thyssenkrupp's German steelworks to India is cost-intensive and weakens our competitiveness in India in the long term," explained Dennis Grimm, the spokesman of the Executive Board of thyssenkrupp Steel.
"Setting up our own local raw material production is not economically feasible for us. Compared to our local competitors, we will not be able to achieve the same economies of scale by supplying from Germany. This is why the sale is the right step for us at the right time," he stated.
According to thyssenkrupp, the proceeds of the sale will strengthen the steel segment's capital base and will be used, among other things, for the green transformation.
This also includes the activities of thyssenkrupp Electrical Steel. As demand for grain-oriented electrical steel remains high in the wake of the global energy transition, the company will increasingly focus on growth markets in Europe and North America in the future.
The transaction is expected to be closed within the next few months.-TradeArabia News Service
