LONDON The merger between ThyssenKrupp AG stainless division Inoxum Group and Finnish stainless producer Outokumpu Oyj has been completed, both companies confirmed Friday.
Under the terms of the deal, Inoxum is now part of Outokumpu, with ThyssenKrupp taking a 29.9-percent stake in the company.
The new Outokumpu will start operations with a new structure and corporate governance on Dec. 29, the companies said. The combined company has been organized into four divisions: stainless coil Americas, led by Kari Parvento; stainless coil Europe, Middle East and Africa (EMEA); stainless Asia Pacific (APAC); and high-performance stainless and alloys.
The close of the transaction came slightly ahead of schedule. An Outokumpu spokesman told AMM earlier this month that the combined entity would begin operations Jan. 1 (amm.com, Dec. 20).
The deal means the Finnish group will transfer 1 billion ($1.32 billion) to ThyssenKrupp, as well as assume 133 million of Inoxums external debt and 338 million of pension liabilities. ThyssenKrupp also will receive a loan note with a current value of 1.25 billion ($1.65 billion) in addition to its stake in the new company.
The merged company, with 16,900 employees, estimated annual revenues of 9.6 billion ($12.7 billion) and a cold rolling capacity of 2.8 million tonnes per year, will have a 40-percent share of the European stainless steel and high-performance alloys market and a 12-percent stake in the worldwide market, Outokumpu said.
"The rationale for building this new industry powerhouse remains as strong as ever: optimizing our production structure, expanding both our product portfolio and market presence to growth markets in the Americas and Asia and reaching annual synergy savings of approximately 200 million," Outokumpu chief executive officer Mika Seitovirta said.
Of the cost synergies, 50 million ($65.9 million) are expected to be achieved in 2013, with a further 150 million ($197.8 million) in 2014.
The combined entity plans to cut its capacity through the previously announced closure of the melt shop in Krefeld, Germany, at the end of 2013. The company also plans to close the melt shop in Bochum, Germany, by the end of 2016, pending a review of its financial performance in 2015, while a reduction of thin cold rolling capacity in Sweden from 2014 onwards is still being considered.
A version of this article was first published by AMM sister publication Steel First.