Tata Steel Limited on Saturday announced its decision to buy the steel business of Usha Martin Ltd. (UML) in an all-cash deal.
In a regulatory filing, it said it had executed definitive agreements for the acquisition of the steel business of UML through a slump sale on a going-concern basis.
The acquisition will be in cash for a consideration of between ₹4,300 and ₹4,700 crore.
UML’s steel business comprises a specialised one metric tonne per annum alloy- based manufacturing facility of long products in Jamshedpur besides a producing iron ore mine, an under-development coal mine and captive power plants.
The closing of the acquisition is subject to fulfillment of various conditions under the agreements. At the closing, Tata Steel or any of its subsidiaries or affiliates may carry out this acquisition, Tata Steel said in its filing.
All the employees pertaining to the steel business will be transferred as part of the acquisition.
Long product strategy
The acquisition is part of the overall strategy to build capability in long products and expand product offerings, including high-value added products, Tata Steel said, adding that approvals from CCI and other regulatory bodies for transfer of mines may be needed. The acquisition may be completed within a six to nine-month span.
UML, which is engaged in manufacturing wire ropes and specialised long products, was scouting for buyers for its steel business.