Global steel giant ArcelorMittal has announced that it has signed a joint venture (JV) formation agreement with the world's second biggest steelmaker Japan-based Nippon Steel & Sumitomo Metal Corporation (NSSMC) in relation to its offer to acquire bankrupt Indian steelmaker Essar Steel India Limited (Essar Steel).
ArcelorMittal stated that its subsidiary ArcelorMittal India Private Limited (AMIPL) submitted a resolution plan for Essar on February 12, which outlined the intention to have NSSMC formally join its bid for Essar Steel. Should the submitted resolution plan be selected and formally accepted by India’s National Company Law Tribunal, ArcelorMittal and NSSMC would jointly acquire and manage Essar Steel. In its resolution plan, AMIPL set out a detailed industrial and turnaround plan aimed at restoring Essar Steel’s fortunes, enabling it to realize its full potential and participate in the anticipated steel demand growth in India.
ArcelorMittal and NSSMC have been operating I/N Tek and I/N Kote in Indiana, US, under joint venture agreements since 1987. I/N Tek and I/N Kote are high-added value downstream steel finishing facilities which serve the automotive and domestic appliance markets.
More recently, in 2014, ArcelorMittal partnered with NSSMC on the acquisition of AM/NS Calvert, a state-of-the art downstream finishing facility in Alabama, US. The facility, which opened in 2010 and has an annual 5.3 million mt capacity, was the largest newly constructed steel facility in the US in 40 years but had failed to reach its potential. A major investment program has been undertaken following the acquisition.