CCI Approves Combination Involving Bhushan Power, JSW entities And JFE Steel

The Competition Commission of India (CCI) on January 20 approved a proposed combination involving Bhushan Power and Steel Ltd, JSW Sambalpur Steel Ltd, JFE Steel Corporation and JSW Kalinga Steel Ltd.

The approval relates to a multi-step transaction involving the transfer of Bhushan Power and Steel's steel business undertaking, and not the company itself, as well as the acquisition of a stake by a foreign partner.

As part of the approved transaction, Bhushan Power and Steel's steel business undertaking will be transferred to JSW Sambalpur Steel Ltd by way of a slump sale. Separately, JFE Steel Corporation will acquire a 50% direct shareholding in JSW Kalinga Steel Ltd, resulting in JFE indirectly acquiring a 50% shareholding in JSW Sambalpur Steel Ltd.

Following completion of the transaction, JSW Kalinga Steel Ltd, and therefore indirectly JSW Sambalpur Steel Ltd, will be operated as a 50:50 joint venture between JFE Steel Corporation and JSW Steel Ltd.

JFE Steel Corporation is part of the JFE Group, under which there are three operating companies engaged in steel manufacturing, engineering and trading businesses.

JSW Kalinga Steel Ltd is a wholly owned subsidiary of Piombino Steel Ltd, which is a subsidiary of JSW Steel Ltd. JSW Sambalpur Steel Ltd is a wholly owned subsidiary of JSW Kalinga Steel Ltd. Both JSW Kalinga Steel and JSW Sambalpur Steel are yet to commence commercial operations.

The target steel business is currently owned by Bhushan Power and Steel Ltd, a public limited company engaged in integrated steel manufacturing operations, including downstream processing of finished steel products. As on date, Bhushan Power and Steel Ltd is an indirect subsidiary of JSW Steel Ltd, held through Piombino Steel Ltd.

The detailed order of the Commission is expected to follow.