Naveen Jindal, the promoter of Jindal Steel and Power Ltd (JSPL), has made an offer to acquire Italian steelmaker Acciaierie d’Italia (ADI) for over $1 billion. The offer, made through private companies overseas, is part of Jindal’s plan to expand his steelmaking facilities overseas and become a major producer of green steel, which uses renewable energy instead of fossil fuels. ADI has been under government administration since February last year and has potential steelmaking capacity of around 10 million tonnes per year.
Jindal’s plan is to upgrade ADI’s plants to make them more energy-efficient and minimize job losses. He aims to convert the company’s blast furnaces, which use coke, to electric arc furnaces, which are more energy-efficient. However, the deal faces stiff competition from a consortium of the Azerbaijan government and Baku Steel, which has promised to supply natural gas as fuel for ADI’s plants.
ADI needs to cover past losses and invest in technology upgrades to meet European standards, which are tough on polluting businesses. The company’s reorganization is being closely monitored by the Italian government. Jindal’s offer is among 10 received by ADI, and the bidding process is expected to take up to six months to complete.
As part of his overseas expansion plan, Jindal has been expanding capacities at group company Vulcan Green in Oman and has negotiated a $150 million investment in Czech Republic’s Vitkovice Steel. Jindal’s offer is his latest move to bolster his position as a global steel producer.