Finnish stainless steel maker Outokumpu has agreed to acquire Inoxum, the stainless steel unit of Germany’s ThyssenKrupp.
The €2.7 billion deal is set to make Outokumpu a market leader in European stainless steel, with almost €12 billion in revenues, more than 19,000 employees and an approximate 50 per cent market share.
Outokumpu already employs around 8,000 people in more than 30 countries and is headquartered in Espoo, Finland.
ThyssenKrupp said the product ranges and customer segments of the two partners are highly complementary. Outokumpu is a leader in austenitic and duplex steels, widely used in the chemical and energy sectors; and Inoxum is a leader in ferritic, nickel-free steel for the automotive and white goods industries as well as an important supplier of high-performance alloys commonly used in the aviation sector.
The combination is expected to create a company with a worldwide, cost-effective and highly competitive production network for a broad range of high-quality stainless products to meet the demands of a diverse range of customer groups, ThyssenKrupp said.
Commenting on the deal, Heinrich Hiesinger, CEO of ThyssenKrupp, said: “The combination of Inoxum and Outokumpu is an important milestone in the implementation of our strategic way forward. The transaction is based on a compelling industrial rationale that is expected to enable the combined entity to compete more effectively in the global marketplace.
“We believe that the transaction opens up a promising perspective and is therefore also in the best interest of Inoxum’s employees. ThyssenKrupp will improve its financial flexibility thanks to this transaction and further sharpen its profile, bringing us one step closer to our target of a diversified industrial group.”
Mika Seitovirta, chief executive officer of Outokumpu, added: “This is a truly transformational transaction. We are forming a new global leader in stainless steel and are adding value for our customers and shareholders that neither company could realize on its own. We see considerable growth opportunities by joining forces, especially in the Americas and Asia. Outokumpu will be a highly efficient, innovative and reliable partner for its customers, and will offer enhanced stability and attractive development prospects to its employees.”
ThyssenKrupp is currently selling assets in order to reduce its debt and re-focus its strategic priorities, with the overalldivestment programme comprising businesses with total sales of around €10 billion. With the signing of the Inoxum transaction, ThyssenKrupp has already signed or closed transactions comprising around 80 per cent of the assets to be divested.
The deal is expected to be completed during the first half of 2012.
