Tata Steel to acquire steel business of Usha Martin for up to Rs 4,700 cr; deal to be completed in 9 months

New Delhi: Tata Steel on Saturday announced that it will acquire the steel business of Usha Martin Limited (UML) for Rs 4,300-4,700 crore.

UML, in a stock exchange filing, said the sale of steel business to Tata Steel will help the company in "significant reduction" of its debt. The deal is expected to be completed in 6-9 months, it added.

Tata Steel, in a release, said it has executed definitive agreements for acquisition of the steel business of UML through a slump sale on a going-concern basis.

"It is proposed that the steel business of UML will be acquired subject to transaction closing, for a cash consideration of between Rs 4,300-4,700 crore (subject to various transaction adjustments)," the release said.

Representational image. Reuters.

The closing of the acquisition is subject to fulfilment of various conditions under the agreements. At the closing, Tata Steel or any of its subsidiaries or affiliates may carry out this acquisition, it added.

UML's steel business comprises the specialised 1 mtpa alloy based manufacturing capacity in long products segment based in Jamshedpur, a producing iron-ore mine, a coal mine under development and captive power plants, Tata Steel said.

The transaction and acquisition structure would be determined shortly, it added.

Tata Steel Group is among the top global steel companies with an annual crude steel capacity of 27.5 million tonnes per annum (MTPA) as on March 31, 2018.

Usha Martin is amongst the largest wire rope manufacturers in the world and a leading speciality steel producer in India.

In May, Bamnipal Steel Ltd, a wholly-owned subsidiary of Tata Steel, completed the acquisition of controlling stake of 72.65 percent in Bhushan Steel Ltd (BSL).

Tata Steel had won the bid to acquire debt-laden BSL in an insolvency auction.