Degussa sells Stollberg to S&B
08-Apr-2004
S&B Industrial Minerals S.A. of Athens, Greece, is acquiring the Stollberg Group from Degussa AG of Dusseldorf, Germany. A definitive agreement to this effect has been signed by both companies. The Stollberg Group is a global market leader in the production of casting fluxes for the steel industry, with production facilities in four continents. The purchase price for 100 percent of the equity has been agreed at EUR43.8 million; including liabilities as of December 31, 2003 assumed by S&B the overall transaction volume amounts to 58.5 million Euro. The deal is subject to the approval of the Supervisory Board of Degussa and of the relevant regulatory authorities. Hence, the transaction is expected to be completed in about two months. The deal will be financed through S&B's current credit facilities.
The Stollberg Group with headquarters in Oberhausen, Germany, is fully owned by SKW Metallurgie AG, a 100 percent subsidiary of Degussa. The Stollberg Group owns production facilities in Germany, the U.S., France, Brazil, India, Korea (the Korean business is a 50:50 joint venture with Samil Co. Ltd.) and China (owned through the Korean business), employing a total of about 350 employees worldwide. Stollberg's core business is the production of casting fluxes, a range of specialised and high value-adding products utilised for the facilitation of the continuous casting process in steel casting. The annual production of Stollberg is about 120,000 MT of powders and granules. It has invested in recent years in new capacities in regional growth markets and has today a capacity in its seven production sites of about 190,000 MT.
Stollberg is the market leader in its field, selling to most of the steel producers in the world. The company enjoys an excellent reputation for high quality, strong customer technical support and commitment to providing innovative, customer-tailored solutions. Total sales for the year ended in December 31, 2003 amounted to EUR60.3 million.
This acquisition enables the S&B group to expand globally into one more "market to mine" integrated chain, based on the industrial mineral wollastonite. Wollastonite is a key component of Stollberg's products and has been already supplied to Stollberg Europe through the OTAVI Minerals Division of S&B. The acquisition of Stollberg and the recently announced agreement of S&B to participate with a majority stake in the largest granular wollastonite mine and processing operation in China, are integrally linked and establish S&B as an important global player in this niche mineral.
Furthermore, Stollberg's well established presence in Brazil, India, Korea and China will accelerate the expansion of S&B with its existing industrial minerals portfolio in these developing and fast growing markets. This is a major acquisition for S&B, as it underscores and promotes S&B's declared strategic objective to expand both geographically and in terms of its product portfolio, establishing global leadership positions in niche industrial minerals markets.
The sale of the Stollberg Group as a part of Degussa's metallurgy operations represents one of the last stages towards completing the successful divestment program that has steadily advanced Degussa's focus on specialty chemicals over the past three years.
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