ArcelorMittal, world’s largest steel maker on Monday completed the acquisition of Essar Steel India Limited (ESIL), and simultaneously established a joint venture with Nippon Steel Corporation (Nippon Steel), called ArcelorMittal Nippon Steel India Limited (AM/NS India), which will own and operate ESIL.

“ArcelorMittal holds 60% of AM/NS India, with Nippon Steel holding the balance,” said a company statement adding that Aditya Mittal, president and CFO of ArcelorMittal, has been appointed Chairman of AM/NS India, and Dilip Oommen has been appointed AM/NS India’s CEO.

Commenting on the closure of the ₹42,000 crore deal, Lakshmi Mittal, Chairman and CEO of ArcelorMittal, said: “The acquisition of Essar Steel is an important strategic step for ArcelorMittal. India has long been identified as an attractive market for our company and we have been looking at suitable opportunities to build a meaningful production presence in the country for over a decade. Both India and Essar’s appeal are enduring. Essar has sizeable, profitable, well-located operations and the long-term growth potential for the Indian economy and therefore Indian steel demand are well known.”

AM/NS India is an integrated flat steel producers, and the largest steel company in western India with crude steel production capacity of 9.6 million tonnes per annum (MTPA).

Eiji Hashimoto, Representative Director and President of Nippon Steel, said, “Nippon Steel and ArcelorMittal will bring out AM/NS India’s potential by providing it with their respective business experience and world-leading advanced technologies, so as to promptly implement the resolution plan and realise its further business expansion. We will strive to establish a prominent presence in India, conforming with its policy to increase domestically-produced steel products.”

AM/NS India’s current level of annualised crude steel production is about 7.5 MTPA. The JV aims to increase the shipments to 8.5 MTPA in the medium term and to increase the finished steel shipments to between 12 and 15 million tonnes through the addition of new iron and steel making assets in the long term.

Aditya Mittal, president and CFO of ArcelorMittal, said “India is a large and strategic market and we are delighted to be here. Our aim is to create sustainable and long-term value by becoming a leading steel manufacturer in the country. This acquisition gives us the opportunity to contribute to India’s expansion in infrastructure and urbanization in the coming decades.”

AM/NS India also has iron ore pellet facilities in the east of India, with current annual capacity of 14 MTPA.