The world’s biggest steel maker, ArcelorMittal, is looking to buy Sprng Energy, the Indian renewable platform of Actis, it was reported. The M&A move is learnt to be a part of ArcelorMittal’s $10 billion global green transformation strategy started in 2020 after Aditya Mittal took charge as Group CEO from his father Laxmi Mittal. This arguably is the first time in India a steel producer is looking at such large M&A opportunities in green energy. Steel production is source of up to a tenth of global carbon-dioxide emissions. ArcelorMittal joins the buyout race to compete with Royal Dutch Shell, Adani Group, Singapore's Sembcorp Energy, and Canadian pension fund CPPIB after Macquarie, another initial contender chose to opt out of this potentially $2 billion transaction (enterprise value) which saw 17 initial contenders. Last year, Actis had mandated Bank of America to officially launch the sale process for Sprng Energy. This is the second platform that Actis had created after it sold Ostro Energy, its original green power platform, to ReNew Power Ventures in 2018 at an enterprise value of $1.5 billion. Sprng Energy has signed power purchase agreements (PPAs) for 2.6 gigawatts (GW), of which 2.1 GW will be operational by March 2022, while another 600 MW is expected to be operational by March 2023. ArcelorMittal’s footprint stretches across Europe, Asia, Americas and Africa. Steel companies, much like fossil fuel majors, are under pressure from policy makers, climate activists and Wall Street to shun legacy practices of carbon emission. ArcelorMittal's India operations are centred around Essar Steel India, located in Hazira, Gujarat, which it acquired in 2019, for Rs42,000 crore with its 40 per cent joint venture partner Nippon Steel Corporation of Japan.
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Aditya Mittal: green transformation strategy
