MUMBAI: JSW Steel has agreed to buy out Praxair India’s entire 74% stake in their joint venture JSW Praxair Oxygen for Rs 240 crore, making the industrial gases supplier its wholly owned subsidiary.
“The said acquisition is strategic in nature as it will provide the company the benefit of backward integration of this critical input,” JSW Steel said in a regulatory filing on Tuesday. The Sajjan Jindal-led steel maker currently sources industrial gases from JSW Praxair Oxygen Private Ltd (JPOPL) and others at prices based on long-term contracts. JPOPL has two air separation plants, each with a capacity of 2,500 tonnes per day, at Toranagallu in Bellary district, Karnataka.
JSW Steel has steelmaking plant in Vijayanagar, Karnataka. The company had in May said it plans capital expenditure of Rs 4,300 crore this fiscal and Rs 2,700 crore in the next on improving logistics, setting up a tinplate mill to expand higher-margin value-added products portfolio, and on other operational efficiency projects. Deloitte Touche Tohmatsu India and Bharucha & Partners, Advocates, and Solicitors carried out financial and legal due diligence for the stake buy, the company said.
JSW Steel shares closed 1.39% up at Rs 1,748.65 apiece on the Bombay Stock Exchange on Tuesday. The stock has gained 81% in the last one year.
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Source: Economic Times