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outokumpu to buy thyssen stainless steel unit in $3.5

by:KingKonree     2020-05-24
* Thysenk rup Bo agreed to sell Inoxum * transactions to Outokumpu including cash, outokumpu accept Inoxum debt * Outokumpu raise 1 euro through allotment * two websites closed, lost 850 jobs * Marilyn Gerlach and Eero vassReuters)-
Oyj, Finland (OUT1V. HE)
Plans to Acquire thysenk rup Co. , Ltd (TKAG. DE)
Stainless steel business in the transaction of value 2.
7 billion euros ($3. 5 billion)
Designed to resist cutting
Asian price competition
The deal will be financed by a 1 billion euro allotment of new Outokumpu shares, which will result in hundreds of layoffs in Germany, because the Finnish stainless steel manufacturer is trying to improve the profitability of the industry, which has long been dragged down by overcapacity, and believes that the integration time is ripe.
However, shares of Outokumpu fell 14% to 6.
Fearing that the deal could pay an extra € 33, and that the deal could initially benefit European competitors, European competitors also compete with stainless steel for tableware, sinks and washing machines imported from Asia.
\"There are some question marks.
\"Outokumpu will be tied for 4 to 5 years in units and employees they don\'t really need,\" said Erkki Vesola, an analyst at Swedish bank . \".
\"Competitors are getting free lunch.
Outokumpu will pay 1 billion euros in cash for its Inoxum Department
35 to 40% market share in Europe
And will bear 0. 422 billion of the liabilities and issue 0. 235 billion of the loan notes to thysenk rup.
The Finnish national entity that controls about 40% of Outokumpu\'s shares is expected to fund the proportional portion of the transaction, and the government may support the acquisition as it protects employment in Finland at least initially.
Outokumpu aims to achieve cost synergies of 225 to 0. 25 billion euros by 2017 at the latest.
\"The price tag is not cheap, and the cost synergy schedule for Outokumpu shareholders is also very long,\" said Mika Karppinen of Evli Research . \".
The deal will take Outokumpu from No.
Its competitors include the European market, including Aperam APAM. LU —
Split up by ancelormittal ISPA. AS last year —and Acerinox (ACX. MC)
No in the world.
1 stainless steel manufacturer.
Credit Suisse says Aperam and Acerinox will be processed. “If a . . .
The merger continued, and we calculated the \"free passenger\" benefits of 15% and 35% market value increases for Acerinox and Aperam respectively, \"the bank said.
The shares of ThysenKrupp will also receive the new Outokumpu shares and 29.
The 9% stake in the expanded Finnish company rose by 2. 21 points 3%
62 euros, more than German blue-The chip DAX index. GDAXI.
Aperam\'s share price rose by 6.
0%, Acerinox rose. 9 percent.
Analysts say they expect the Finnish government to be involved in the rights issue if production facilities in Finland\'s Outokumpu are not laid off.
Solidium, the state investment agency, declined to comment.
\"This is the state in Finland that supports the stainless steel industry,\" said an analyst who declined to be named . \".
Outokump\'s top four shareholders are united as 30.
84%. social insurance institutions in Finland are 8.
0%, Ilmarinen Mutual Pension Insurance Company and 3.
9%, with the Finnish National Pension Fund 1. 9 percent.
Outokumpu said that the combination with Inoxum will lead to 850 layoffs in Germany, as the two melting stores in Krefeld and Bochum in the industrial center of the Ruhr Valley in Germany have
It does not say the work of Finland.
The two companies have promised that no other production sites will be closed, at least by the end of 2015, and no mandatory layoffs will be made until then.
But some people wonder if the factory is closed.
1 will be deleted.
Annual production capacity of 4 million tons, accounting for 16% of European production
It will be enough to reverse the situation.
Until five years ago, Europe was a net exporter of stainless steel, but global production capacity grew rapidly and production costs in Asia were lower, meeting about 20% of Europe\'s demand.
Stainless steel production in the region has been losing money-
Did it for a while.
China, South Korea and Taiwan are the largest stainless steel exporters in Europe.
Corrosion also makes it ideal for barrels and pipelines in the chemicals, oil and gas industries.
\"The negative is that in them (
Thyson and belong to Outokumpu)
When Europe\'s capacity is cut, it is good for competitors. . .
This will not prevent Asian competitors from importing more stainless steel to Europe . \"
The IG Metall union in Germany has approved the planned sale, and the tissenk rup\'s Board of Supervisors is expected to formally approve the agreement later on Tuesday.
Rothschild Rott is advising ThysenKrupp on the deal. UL, Citigroup (C. N)
Deutsche Bank (DBKGn. DE).
The consultant for Outokumpu is JP Morgan (JPM. N)
Pereira. And the Nordic bank confidential agreement. ST. ($1 = 0. 7625 euro)
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