JFE Steel to Increase Controlling Share in JSW Steel to Above 15%

JFE Steel started discussion to increase controlling share in JSW Steel, Indian major steel maker, to above 15% from present 14.99%. Indian government recently eased limitation on share acquisition ratio in Indian companies to below 25% from conventional below 15%. JFE Steel examines how many controlling shares to acquire additionally and when to implement the share acquisition. JFE Steel aims to enhance partnership with JSW Steel to expand steel business in India.

JFE Steel signed a strategic collaboration agreement with JSW Steel in November 2009 and reached an agreement of equity participation and technology licensing in October 2010. JFE Steel took up allocation of JSW Steel’s new shares to a third party and acquired 14.99% shares at approximately 100 billion yen.

Indian law had obliged takeover in order to acquire more than 15% shares in Indian company. Thus de fact limitation on share acquisition rate was 14.99%. The law was revised and the limitation was eased to 25% on October 23. JFE Steel has sent Mr. Yasushi Kurokawa, senior managing director, to JSW Steel as managing director of JSW Steel. JSW Steel will become JFE Steel’s equity method affiliate when JFE Steel holds more than 15% controlling shares.

JFE Steel is reinforcing cooperation with JSW Steel through technology licensing and personal exchanges. JFE Steel is hurrying to license production technology of automotive steel sheet and to start local supply of cold rolled sheet using JFE Steel’s hot rolled sheet. JFE Steel also supports operative improvement in Vijayanagar iron works of JSW Steel by technology transfer and eyes participation in JSW Steel’s project to construct an integrated iron works in West Bengal.