Guangzhou-based commodity conglomerate Cedar Holdings has completed its acquisition of UK-headquartered steel trader Stemcor. Stemcor will retain its name and autonomy.
The deal was agreed in January (see Kallanish passim). Although unconfirmed by either side, the deal is reportedly valued at $150 million and sees ownership transferred fully from US investor Apollo group.
Cedar, which has so far been largely focused on non-ferrous metals and chemicals, said the acquisition will help to develop its ferrous metals industrial chain. Cedar is China’s largest private commodity trader, with 2017 revenue of $32.7 billion.
In 2019 Stemcor sourced and delivered 3.1 million tonnes of steel and raw materials, up 5% on-year. Revenue fell -10% to $1.74 billion due to a higher proportion of raw material shipments and lower prices. Profit before tax halved to $8m.
“The Group faced a number of external challenges to the business throughout 2019, from a softening global economy, declining industrial activity, continuing Brexit-EU and trade war uncertainty and increasing levels of protectionism,” Stemcor chief executive Steve Graf said last month.
Stemcor has a 70-year history in steel trading. It was once one of the top three global traders of steel and raw materials. Around 20% of its business is focused on the Chinese market, Kallanish understands.