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Loan for Acquisition of Essar Steel India Limited by Nippon Steel Corporation and ArcelorMittal S.A. of Luxembourg
Supporting Overseas M&A of Japanese Company in the Steel Industry under the Growth Investment Facility

  • Region: Asia
  • Others
  • Overseas Investment Loans
March 17, 2020
  1. The Japan Bank for International Cooperation (JBIC, Governor: MAEDA Tadashi) signed on March 16 a loan agreement amounting up to approximately USD3,087 million (JBIC portion) to finance part of the funds required for Nippon Steel Corporation ("Nippon Steel"), in partnership with ArcelorMittal S.A. of Luxembourg ("AM"), to acquire Essar Steel India Limited ("Essar"*1 ). The loan will be extended to AMNS Luxembourg Holding S.A., a joint venture between Nippon Steel and AM. The loan is co-financed with MUFG Bank, Ltd., Sumitomo Mitsui Banking Corporation, Mizuho Bank Europe N.V. and Sumitomo Mitsui Trust Bank, Limited and the total co-financing amount is USD5,146 million. The loan is extended under JBIC's Growth Investment Facility*2 /Overseas Business Expansion Window.
      
  2. The steel market in India is expected to make steady growth along with its economic and population growth. At the same time, localization of production of steel products is progressing. Essar, or renamed ArcelorMittal Nippon Steel India Limited ("AM/NS India") is the fourth largest steel company in India, with an integrated steel mill*3 in western India, an area strong in steel demand. The company has a diversified range of product line-up, mainly comprising flat steel products, and expects further business expansion going forward. The acquisition, revitalization and expansion of AM/NS India, enables Nippon Steel to capture growing steel demand in India in mid to long term while contributing to Make in India campaign as a member of India's steel industry.
      
  3. This loan supports the overseas business deployment of Nippon Steel by providing necessary long-term foreign currency funds for M&A by the Japanese company. Thereby, it will back up its overseas expansion of existing business as well as new business deployment, and contribute to maintaining and strengthening of the international competitiveness of Japanese industries.
      
  4. Supporting overseas M&As by Japanese companies is one of the key focus areas identified in JBIC's Third Medium-Term Business Plan for FY2018-2020. As Japan's policy-based financial institution, JBIC will continue to support overseas M&A activities of Japanese companies and their overseas business expansion in collaboration with private financial institutions.
      
Note
  1. *1 
    Essar changed its corporate name to ArcelorMittal Nippon Steel India Limited after the acquisition was completed on December 16, 2019.
  2. *2 
  3. *3 
    In a steel mill, manufacturing of pig iron from iron ore, steel making, rolling and processing are conducted in an integrated manner.

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