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Tata Steel to buy steel business of Usha Martin for up to $650 mn

Tata Steel will pay $595-650 million for Usha Martin's steel business in cash.
BY BEx Bureau
BusinessEx
Sep 24, 2018

Indian steel major Tata Steel has agreed to acquire the steel business of Usha Martin Ltd (UML). This is the second acquisition of Tata Steel this year after the purchase of Bhushan Steel in May.

Tata Steel will pay $595-650 million for Usha Martin's steel business in cash. The deal is likely to be completed in 6-9 months. The closing of the acquisition is subject to fulfilment of various conditions and regulatory approvals.

The company said, "The parties shall jointly work towards fulfilment of conditions precedent which are largely regulatory approvals required for the transfer of the business undertaking. All the employees pertaining to the steel business will transfer as part of the acquisition."

Tata Steel has said that the acquisition is part of the overall strategy to build capability in long products. The company also said that this will expand product offerings, including high-value-added products.

UML is a special steel and wire rope manufacturer. The steel business of Usha Martin accounts for nearly 70% of the company's revenue.

"At the closing, Tata Steel or any of its subsidiaries or affiliates may carry out this acquisition. The parties shall jointly work towards fulfilment of conditions precedent which are largely regulatory approvals required for the transfer of the business undertaking. All the employees pertaining to the steel business will transfer as part of the acquisition," Tata Steel added.

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