India’s power producer JSW Energy Ltd. has agreed to acquire Canadian coal company CIC Energy Corp. for 414 million dollars, the company said on Wednesday.
The acquisition should allow JSW, part of the conglomerate owned by India’s billionaire Jindal family, to secure further coal supplies for its power plants. The deal at 7.42 Canadian dollars per share was on Tuesday accepted by the board of the Toronto-listed CIC, which owns and develops coal mines in Botswana with reserves of about 2.6 billion tons.
“The offer values the total equity of CIC Energy at approximately 422 million Canadian dollars on 56.8 million shares,” a statement issued by CIC said.
The CIC board decided to recommend accepting the JSW offer after its financial adviser Deutsche Bank Securities Inc. said the offer was “fair, from a financial point of view.” The acquisition will be carried out by a subsidiary of JSW Energy and is due to be completed by February 28, 2011, the statement said.
Earlier this year, the company acquired a majority stake in South African Coal Mining Holdings.
Indian companies, including Coal India Ltd., the world’s largest coal producer, have been scouting for overseas reserves. JSW is the third Indian company after the Aditya Birla Group and Tata Group to enter the Canadian resource market in the past three years.