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SSAB to Acquire Ipsco
05/03/2007 - Ipsco and SSAB Svenskt Stal AB have entered into an agreement providing for SSAB to acquire Ipsco for U.S. $160 per share in cash, giving the deal a total equity value of U.S. $7.7 billion. The Boards of Directors for both companies have approved the transaction.
Ipsco Inc. and SSAB Svenskt Stal AB have entered into an agreement providing for SSAB to acquire Ipsco for U.S. $160 per share in cash, giving the deal a total equity value of U.S. $7.7 billion.
The Boards of Directors of both companies have approved the transaction, and closing is not conditional on SSAB obtaining financing, as SSAB has already received commitments for bank financing of the acquisition. The transaction is expected to be accretive for SSAB and to generate annual post tax synergies of SEK 600 million, with the major part to be realized in the next two years. SSAB says that it intends to pursue a SEK 10 billion rights offering during 2007.
“This transaction delivers significant value to Ipsco’s shareholders,” satetd Ipsco President and CEO David Sutherland. “It also joins Ipsco with a leading player in the global steel industry and reinforces our already solid position as a leading supplier of steel plate and energy tubulars in North America. SSAB is a highly regarded company with a first-rate workforce that shares many similar values with Ipsco, including a commitment to quality products, workplace safety, and manufacturing excellence. As part of this new, larger company, we will have a more diversified product offering that will enhance our ability to better serve both existing and new customers.”
“The acquisition of Ipsco represents a further step in SSAB’s 2010 strategy toward global leadership in value-added steel,” said SSAB President and CEO Olof Faxander. “Through this transaction, SSAB will accelerate its growth and acquire a platform for future expansion and market presence in North America. The transaction will result in an immediate and significant accretion to SSAB’s earnings and cash flow, bringing significant strategic and financial benefit to SSAB.”
“We are very excited about this opportunity to combine two of the most successful and profitable steel companies in the world. Ipsco’s state-of-the-art facilities and their world-class effectiveness in combination with SSAB’s leading technology, unique product and process capabilities and first-class service model will create value for our customers and our shareholders,” Olof Faxander continued.
The transaction will be completed by way of a plan of arrangement under applicable Canadian law. In addition to Ontario court approval, it will also require the approval of 66 2/3% of the votes cast by Ipsco shareholders at a special meeting that will be called to consider the arrangement. The transaction will also be subject to certain other customary conditions.
Both companies note that this announcement does not constitute an offer to issue or sell, or the solicitation of an offer to acquire or buy, shares and rights to subscribe for shares to any person in any jurisdiction.
Ipsco is a leading producer of energy tubulars and steel plate in North American with an annual steel making capacity of 4.3 million tons. Ipsco operates four steel mills, eleven pipe mills, and scrap processing centers and product finishing facilities in 25 geographic locations across the United States and Canada. The company's pipe mills produce a wide range of seamless and welded energy tubular products including oil & gas well casing, tubing, line pipe and large diameter transmission pipe. Ipsco also provides premium connections for oil and gas drilling and production.
SSAB is a Swedish-based publicly traded corporation with a leading European position in quenched and tempered heavy plate and EHS/UHS steel sheet. The Group comprises four divisions: Division Sheet and Division Heavy Plate are the steel operations with steel shipments of 3.1 million tonnes in 2006; Plannja is a processing company in building products; and Tibnor is the Group's trading arm supplying a broad product range of steel and metals. The Group has sales revenues of almost US$ 4.6 billion. SSAB has 8800 employees and has operations or offices in over 40 countries and a worldwide sales presence.
