Displaying items by tag: RHI Magnesita
Belgium: The European Commission has cleared a proposed merger between Brazil’s Magnesita and Austria’s RHI Group subject to the divestment of a number of production sites in Europe. Magnesita is required to sell its plant in Oberhausen, Germany along with its Oberhausen business in the European Economic Area (EEA). RHI is required to sell its dolomite business in the EEA including plants in Maroni, Italy, and Lugones, Spain. Magnesita and RHI said they are speaking to potential buyers at present.
“With today’s milestone, we have come significantly closer to the planned merger with Magnesita – and thus a globally leading company in the refractory industry which optimally combines the strengths of both companies,” explains Stefan Borgas, chief executive officer (CEO) of RHI and designated CEO of the future RHI-Magnesita Group.
Outstanding approvals required to complete the merger include that from the Brazilian Antitrust Authorities and the approval of the cross-border merger, of RHI AG with its subsidiary RHI MAG NV in the Netherlands, by the RHI General Meeting.
Magnesita grows industrial refractory sales in 2016
17 March 2017Brazil: Magnesita’s revenue from its Industrial Refractory Solutions division rose by 3.3% year-on-year to US$144m in 2016 from US$140m in 2015. Its sales volumes grew by 10.2% to 147,000t from 133,000t. It attributed the gains to good performance in the Middle East, Africa and the Commonwealth of Independent States (CIS) region despite a declining cement industry in Brazil. Despite its success in its Industrial Refractory Solutions division the group reported falling overall refractory volumes and revenue in 2016 caused by decreases in steel production in South America and Europe. The company remains committed to merge with RHI by the end of 2017.
RHI and Magnesita to merge to form RHI Magnesita
06 October 2016Austria/Brazil: RHI and Magnesita are to merge to create a new refractory company called RHI Magnesita. RHI’s management board has agreed to sign a share purchase agreement with Magnesita’s controlling shareholders regarding the acquisition of a controlling stake of at least 46%, but no more than 50% plus one share of the total share capital of Magnesita, pending RHI’s supervisory board approval. The purchase price for the 46% stake will be paid in cash amounting to Euro118m and 4.6 million new shares to be issued by RHI Magnesita. The new company will be established in the Netherlands and listed on the London Stock Exchange.
As pat of the agreement, GP Investments (GP) will become a relevant shareholder of RHI Magnesita. The combined company’s corporate governance will consist of on a one-tier board structure while GP will be represented on the board of directors.
The deal is dependent on approvals by the relevant competition authorities, the migration of RHI to the Netherlands, the listing of RHI Magnesita’s shares in the premium segment of the Official List on the Main Market of the London Stock Exchange and RHI’s shareholders not having exceeded statutory withdrawal rights in an amount of more than Euro70m in connection with organisational changes preceding RHI’s migration from Austria. The migration and the preceding organisational changes in Austria require qualified approval by RHI’s shareholders’ meeting. If the deal is terminated for reasons not under the control of Magnesita’s controlling shareholders, an aggregate break fee of up to Euro20m is payable by RHI to Magnesita’s controlling shareholders.
The merger transaction is expected to complete in 2017. Until then, the two companies will remain completely separate and independent. Therefore customers, suppliers, employees and other stakeholders should expect no change in management teams, commercial relationships, supply chains and product offerings during this period.
RHI and Magnesita say that the new refractory company will bring together complementary businesses, both in terms of products and geographical footprint. Magnesita have a presence in South America and the US compared to RHI’s presence in Europe and Asia. The merger is also expected to aid the company’s position against the growing Chinese refractory industry. In addition, Magnesita’s position in dolomite-based products is complementary to RHI’s asset portfolio, which traditionally has a strong focus and an excellent market reputation for high-quality magnesite products.
Synergies from the merger are expected to deliver at least Euro36m in earnings before tax (EBIT) by 2020. However, if RHI Magnesita’s stake in Magnesita significantly exceed 46%, RHI expects substantially higher synergies of approximately Euro72m, especially in the areas of enhanced production efficiency and cost benefits in research and development, marketing and administrative functions. In addition, capital expenditure synergies are expected to amount to be Euro2 – 7m/yr and aggregate working capital savings of Euro40m are expected in the coming years.