World's largest steelmaker, ArcelorMittal has said it would form a joint venture with Japan's Nippon Steel and Sumitomo Metal to bid for bankrupt steelmaker Essar Steel India. The joint venture is its latest attempt to crack the world's fastest growing steel market. The company is in the final stages of signing a deal with state-run SAIL, with which it first signed a preliminary understanding in 2015 to jointly produce 1.2 million tonnes of automotive steel a year, but disagreements over commercial terms had delayed the venture.
ArcelorMittal's CEO Lakshmi Mittal said, “Partnering for Essar Steel was always our intention and adds further strength to our offer.” President of Japan's biggest steelmaker, Kosei Shindo said if the JV's bid to acquire Essar Steel succeeds, it would help Nippon Steel tap into the Indian market, “Where steel demand is expected to grow sharply in the mid and long term.”
ArcelorMittal stated it submitted a plan on February 12 to the NCLT to bid for Essar Steel in partnership with Nippon Steel. Essar Steel was among a dozen of India's biggest debt-defaulters that were pushed to bankruptcy court last year after an RBI order aimed at clearing $147 billion in bad loans at the nation's banks suffered through lending. The company sold its entire stake in Uttam Galva Steels to the company's founders at less than the market price of the stock.
