American investment fund Kohlberg Kravis Roberts (KKR) has acquired a 100% stake in Spanish steelmaking group Gallardo Balboa, Kallanish notes.
According to media reports, the group has breached its commitments to KKR, including the capital investment that was necessary to protect the interests of shareholders and the company.
Workers’ representatives and KKR held a meeting on 20 November at the headquarters of Gallardo Balboa in Jerez de los Caballeros. During this meeting the fund confirmed its intention to give solvent continuity to the company and preserve the workforce, say local unions.
Meanwhile, the regional Government of Extremadura expressed its concern over a foreign investor taking control of Gallardo Balboa. It does, however, consider it positive that KKR will enable the continuity of the company’s activity.
The company did not issue a comment before deadline.
In August the European Commission approved the acquisition of majority control in Gallardo Balboa by KKR. The EC concluded that the proposed transaction would raise no competition concerns given the minimal horizontal overlaps and vertical links between the activities of the companies (see Kallanish passim).
KKR had already taken control of other assets belonging to the group headed by Alfonso Gallardo in 2014, specifically in the cement and paper production sectors.
Gallardo Balboa produces steel through the EAF route at a number of sites in Spain. It specialises mainly in the supply of long products and tube.