SupplyLines
MERGERS & ACQUISITIONS
During the last quarter of 2013, businesses focused on expansion, increased efficiency and strategies that would enable them to increase market share. Acquisitions of raw materials projects and steelmaking ventures were most prevalent, and buyers hope the now-completed sales will bring a prosperous 2014.
ArcelorMittal-NSSMC JV acquires ThyssenKrupp’s US steel mill Global steel giant ArcelorMittal announced December 2 that it entered into a 50/50 joint venture partnership with Japan-based Nippon Steel & Sumitomo Metal Corporation (NSSMC) to acquire the Alabama-based steel processing plant yssenKrupp Steel USA (TK Steel USA) from German steelmaker yssenKrupp for an agreed price of $1.55 billion. e transaction, which is expected to deliver $60 million of annual synergies, will be financed through a combination of equity and debt at the joint venture level. e transaction includes a six-year agreement to purchase 2 million mt of slab annually from yssenKrupp’s Brazil-based steel mill TK CSA, using a market-based price formula. TK CSA has an option to extend the agreement for an additional three years at more favorable terms to the JV, compared with the initial time period. ArcelorMittal stated that the remaining slab balance for the Alabama steel mill will be sourced from ArcelorMittal plants in the US, Brazil and Mexico. ArcelorMittal will be responsible for marketing the product on behalf of the JV. e price ArcelorMittal will receive for its slabs will be determined by the volume, price and cost performance of the JV. e Calvert facility will complement ArcelorMittal’s existing auto business in the US. ArcelorMittal’s current facilities for the auto segment in the US are at high levels of capacity utilization and the NAFTA automotive market is expected to show an increase in vehicle production of approximately 15 percent over the next decade. is acquisition will also strengthen ArcelorMittal’s position in supplying the NAFTA energy industry, which is expected to demonstrate growing demand for energy pipe and tube products due to increases in oil and natural gas exploration and production. BlueScope to acquire OneSteel sheet and coil processing business On October 21, Australian flat steel producer BlueScope announced it agreed to acquire from Australia-based Arrium Limited its OneSteel sheet and coil processing and distribution businesses in Sydney, Brisbane, Adelaide and Perth. BlueScope will pay inventory value at completion (as of September 30 this was $23.1 million) for the assets and assumed liabilities and expects to incur net integration costs of $7 million. BlueScope said that the acquisitions will further improve the efficiency by lowering costs through the integration of these businesses with the company’s existing operations.
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e acquisition is subject to Australian Competition and Consumer Commission approval. Completion was targeted for the end of the December quarter of 2013.
Anglo American completes sale of Amapá iron ore project UK-based mining giant Anglo American announced on November 4 that it completed the sale of 100 percent of the Amapá iron ore operation in Brazil to Zamin Ferrous Ltd., a private international mining group that has been operating in Brazil, following receipt of regulatory approval for an initial total cash consideration of $134 million. Anglo American stated they will use the proceeds to pay down debt. At that time, the Amapá project was in its initial stage and up to 30 million mt of iron ore per year was expected to be produced starting from 2020. e project includes a significant iron ore deposit and a 192-kilometer railway connecting the mine location to an existing port facility.
Volta Mining acquires iron ore project in Pilbara region On November 22, Australia-based iron ore company Volta Mining Limited (Volta Mining) announced it would acquire the Newman direct shipping ore project located in the Pilbara region of Western Australia. e project is in close proximity to existing and proposed third party railways. Volta Mining also stated that it is undertaking a capital raising to advance its current and newly acquired projects, including the Kango and Mbombo iron ore projects.
ICE acquires Singapore Mercantile Exchange, expands into Asian markets IntercontinentalExchange Group, Inc. (ICE), the leading global network of exchanges and clearing houses, announced November 20 a definitive agreement to acquire Singapore Mercantile Exchange (SMX) in an all-cash transaction. e acquisition will enable ICE to expand into the Asian markets. Under the terms of the agreement, ICE will acquire 100 percent of Singapore Mercantile Exchange (SMX), including the SMX Clearing Corporation (SMXCC), a wholly owned subsidiary of SMX and the clearing house for all SMX trades. SMX operates futures markets in Singapore across metals, currencies, energy and agricultural commodities. SMX will continue to be based in Singapore and operate as a separate recognized body with its own independent board of directors.
Volume 7; Issue 1
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