Essar set to acquire Canada-based Algoma

Essar Global has received approval from the Canadian government for acquisition of Algoma Steel for Canadian $1.85 billion (Rs 7,100 crore), as required under the country's foreign- investment rules.

The company had obtained approval through its wholly- owned subsidiary Essar Steel Holdings under the Investment Canada Act, it said in a press release issued yesterday.

The regulators approved the deal after Essar agreed to keep the Canadian steel company's head office in Sault Ste Marie, Ontario and ensured a boost in annual capital expenditures.

Essar Global chairman Shashi Ruia said he was "delighted with the approval."

He said the "acquisition will be of enormous benefit to both his company and Algoma, as well as the City of Sault Ste Marie, the province of Ontario and Canada as a whole."

The company has also agreed for continued prominent and substantial role of the existing management of Algoma.

"Essar's acquisition of Algoma will enable us to manage new growth opportunities and migration of the best technological and engineering practices in both organisations," said Denis Turcotte, who will continue as Chief Executive Officer of Algoma.

"I am confident that this is a win-win situation for all Algoma stakeholders, employees and also the local community of Sault Ste Marie and the province of Ontario," Turcotte added.

The company has now received all regulatory approvals necessary to complete the arrangement, the release said.