Billionaire brothers in rival talks to save Italian steelmaker: Sources

Apr 30 2014, 23:49 IST
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government and the unions. But Lami did not know when the meeting would take place.

A source close to Lucchini said the person had no knowledge about a meeting taking place with JSW in coming days.

The sources could not say when a sale decision was likely and that at least Jindal Steel has yet to appoint a financial adviser.

All the sources declined to be named because they are not authorised to talk to the media. A Lucchini spokesman declined comment while a Jindal Steel spokesman did not respond to a request for comment.

A JSW spokesman when contacted said that "as part of its growth strategy, the company looks to evaluate opportunities for growth, both organically and inorganically".

COMPETING FOR DEALS

Apart from Jindal Steel and JSW, Swiss-based trader Duferco had also shown an interest in the facilities before pulling out last month. The world's top steel trader said it had decided not to bid for the Piombino complex because it could not commit to maintaining full employment and keeping the Piombino blast furnace running.

Jindal Steel is controlled by lawmaker Naveen Jindal while JSW's chairman is his elder brother Sajjan. JSW's No. 2 shareholder, Japan's JFE Steel, is the world's ninth-largest steel company.

JSW already owns a plate and pipe mill in the United States while Jindal Steel earlier this week started a 2 million-tonne-per-year plant in Oman.

This is the second time in recent months that the brothers have been pitted against each other on acquisitions, following their rival bids to buy the Indian iron ore assets of UK trader Stemcor. A deal on that has yet to materialise.

India's steel consumption inched up just 0.6 percent to about 74 million tonnes in 2013/14, the lowest in four years, according to the steel ministry. The brothers' new-found interest in competing for assets reflects the market situation and the strong desire to grow their empires, said analysts.

"In a growing competitive environment, both companies shall be inevitably pitted against each other on asset sales internationally," said Ashima Tyagi, senior consultant at research and consulting firm InfralineEnergy.

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