India's JSW Steel says to buy rest of JSW Ispat

MUMBAI Sat Sep 1, 2012 10:26am EDT

MUMBAI (Reuters) - India's No.3 steelmaker JSW Steel Ltd (JSTL.NS) is to take full control of JSW Ispat Steel Ltd (JSWI.NS) in an agreed all-share deal that will allow it to reap the full benefits of the subsidiary's move into profit.

JSW Steel, which is already the top shareholder in JSW Ispat after a $476 million deal in 2010, said on Saturday it would pay one share for every 72 JSW Ispat shares.

It did not give a value for the deal, but said it would issue 18.6 million new equity shares and 485.4 million new preference shares.

JSW Steel shares closed on Friday at 693.7 Indian rupees, while JSW Ispat's closed at 9.55 rupees.

JSW Steel, in which Japanese steelmaker JFE Holdings (5411.T) owns a stake of about 15 percent, said it hoped to complete the deal by the end of fiscal year 2012-13.

Mumbai-based JSW Steel said that after the deal it would have an annual capacity of 14.3 million tonnes.

Indian steel demand has been growing at a near double-digit percentage over the past few years, pushing local firms to boost capacity and drawing global steelmakers including ArcelorMittal (ISPA.AS) and POSCO (005490.KS) to set up base in the country.

But consumption has waned in recent quarters as Asia's third-largest economy slows.

(Reporting by Shamik Paul; Writing by Arup Roychoudhury; Editing by Mark Potter)