India's leading steel producer JSW Steel has withdrawn its takeover bid for US-based United Coal, following in the footsteps of Essar Steel, which quit the race for the firm in September this year.
"We have opted out of the race to acquire United Coal," JSW Steel Vice-Chairman and Managing Director Sajjan Jindal told PTI on the sidelines of the International Coal Conference organised by industry chamber Assocham here.
Jindal said JSW Steel withdrew its bid a few months ago on account of high valuation of the property, but following the global economic slowdown, the value of the targeted firm has declined steeply and United Coal's shareholders do not want to sell.
"It (United Coal) does not want to sell the property now because of the decline in valuation," he said.
United Coal, a privately-held metallurgical coal company, owns mines in Virginia and Kentucky and has total reserves of about 165 million tonnes. It produces over 6 million tonnes of coal annually, and the production could be increased to 10 million tonnes.
Earlier this year, United Coal's assets were estimated to be worth around $2 billion and Jindal had shown confidence in buying the firm.
Other than JSW Steel, seven leading companies, including Essar, were in the race for the firm. Ruias-led Essar Group had in September withdrawn the bid because the price then was felt to be too high.
In the first half of the year, when coal and coke prices were at their peak, Indian steel firms were looking to acquire mining assets abroad.
Now as thermal and coking coal prices have stabilised, Indian companies are on the lookout for overseas firms as their values have also come down steeply due to the global financial meltdown.
