7. Intangible assets

7. Intangible assets

Goodwill acquired in a business combination is allocated at acquisition to the cash‑generating units expected to benefit from the combination. Goodwill is tested for impairment annually, or more frequently if indicators of impairment exist. The Group’s annual goodwill impairment test as at 31 March 2026 resulted in no impairment of goodwill (2025: no impairment). Further information on the impairment test is disclosed in Note 8.

Movements in intangible assets during the year primarily reflect continued investment in computer software and the impact of business combinations. In 2026, intangible assets increased compared with the prior year, mainly due to the recognition of goodwill arising from the acquisition of LAG Velsen B.V. and additional investments in computer software.

Acquisition of LAG Velsen B.V.

On 2 January 2026, the Group, through its wholly-owned subsidiary Tata Steel IJmuiden B.V. (TSIJ B.V.), acquired 100 percent of the shares and voting interest in LAG Velsen B.V. As a result, the Group obtained control of LAG Velsen B.V. in accordance with IFRS 10 Consolidated Financial Statements. Through this acquisition, the Group obtained control over an integrated energy business comprising three power plants (Velsen 24, Velsen 25 and IJmond 01) and a solar facility. The acquired activities and assets generate electricity and steam primarily using residual gases from the Group’s steelmaking operations at the IJmuiden site. Together, the acquired inputs and processes are capable of producing outputs and therefore constitute a business in accordance with IFRS 3.

The acquisition has been accounted for as a business combination under IFRS 3 Business Combinations. TSIJ B.V. is the legal acquirer, while TSN is the accounting acquirer for the purposes of the consolidated financial statements.

The Group recognizes the identifiable assets acquired and liabilities assumed at their acquisition-date fair values, and goodwill has been recognized as the excess of the consideration transferred over the net fair value of the identifiable assets and liabilities. Included in the identifiable assets and liabilities acquired at the date of acquisition of LAG Velsen B.V. are inputs (power plants, inventories, tolling contract), production processes and an organised workforce. The Group has determined that together the acquired inputs and processes significantly contribute to the ability to generate revenue. The Group has concluded that the acquired set is a business.

Taking control of LAG Velsen B.V. will enable the Group to integrate the conversion of blast furnace gases into electricity, which is considered strategically linked to the transition of the Group to more sustainable steel production. 

A. Consideration Transferred

The total consideration transferred amounted to €122.4 million, comprising of

• Cash consideration: €114.6 million

• Deferred consideration: €9.4 million

• Net debt correction: €(1.6) million

The deferred consideration is payable 24 months after acquisition date.

B. Acquisition related costs

The Group incurred acquisition-related costs of €225.000 on legal fees, due diligence and consultancy costs. These costs have been included in ‘Other operating items’, refer to Note 2.

C. Identifiable assets acquired and liabilities assumed

The following table summarises the recognised amounts of assets acquired and liabilities assumed at the date of acquisition:

Measurement of fair values

The valuation techniques used for measuring the fair value of material assets acquired were as follows:

D. Goodwill

Goodwill arising from the acquisition has been recognised as follows:

The goodwill is attributable mainly to the skills and technical talent of LAG Velsen B.V.’s workforce and the expected synergies expected to be achieved from integrating LAG Velsen B.V. into the Group’s existing business. None of the Goodwill recognised is expected to be deductible for tax purposes. The goodwill is allocated to the TSIJ CGU for impairment testing.