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Last updateTue, 17 Mar 2015 2pm

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#InTheFamily: Billionaire Jindal brothers in competing bids for Italian steel giant

India's billionaire brothers, Naveen and Sajjan Jindal, have begun competing talks to buy parts of Italy's second-largest steelmaker Lucchini following an appeal from Pope Francis himself.

The brothers' companies, Jindal Steel and Power and JSW Steel, are said to be discussions with Italy authorities for the failed company which has failed to attract investors.

Pope Francis earlier this month called for those in power in Italy to use their "creativity" to resolve Lucchini's problems.

With Italy still struggling to emerge from its longest postwar recession and unemployment running at 13 percent, the highest level since at least 1977, the shutdown of another piece of industrial infrastructure would underline the deep problems facing the euro zone's third-largest economy.

For the Jindals, Lucchini would give them an opportunity to accelerate an expansion of their operations outside of India where steel demand growth has been soft.

And they might not even have to fork out a fraction of the $5 billion that Forbes said the Jindal family is worth; heavy liabilities and a need to protect jobs mean Lucchini could be sold for just one euro, Italian media reports say.

Formerly owned by Russia's Severstal, Lucchini was declared insolvent in 2012 and later placed under "special administration" - a procedure designed to save large firms and avoid heavy job losses. It fell victim to the 2008 recession that has cut Europe's steel demand by about a quarter.

Lucchini's main facilities include a 2.5 million-tonne-per-year steel complex in the Italian town of Piombino equipped with a blast furnace, and a wire rod mill in Lecco in the north of the country.

"Our interest is very preliminary as of now but they have some mills that look interesting," said a source at Jindal Steel. "I don't think we will be too keen on their blast furnace."

A second Jindal Steel source confirmed the company's interest in the Lucchini facilities.

JSW too is looking at the properties and its senior management could visit Italy next week, a company source and an industry source told Reuters.

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 strong desire to grow their empires, said analysts.

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