China’s Cedar completes purchase of UK-based steel trader Stemcor

Cedar Holdings Group Co, a China-based privately owned commodities business, has completed acquisition of Stemcor Global Holdings, a privately held, independent UK-based steel trading and distribution company, Stemcor said June 30.

Conclusion of the deal, for an undisclosed sum, follows the signing of a sale and purchase accord between the parties in January at the World Economic Forum in Davos.

The transaction marks the latest acquisition of a European-based steel industry concern by a Chinese entity, following steelmaker Hesteel Group’s acquisition of Luxembourg-based steel trader Duferco International Trading in 2015 and Jingye Steel Group’s acquisition of steelmaker British Steel in March. China is the world’s largest steelmaker and consumer.

Cedar, with a total revenue of over $40.6 billion in 2019, is listed on the Fortune Global 500 list and says it is involved in the development of new metal materials and building green supply chains. Headquartered in Guangzhou, the group has branches in Hong Kong, Singapore, Switzerland, Germany, France and the US, as well as offices across Asia, Europe and Africa.

Stemcor, with a worldwide trading network, said it will retain its name and autonomy.

Established in the 1950s, the company has 30 offices worldwide and is involved in steel supplies, facilitation of financing, logistics, distribution, the provision of stockholding of niche products and other value-added services.

A turbulent period in steel markets which led to price reductions in 2015 was a factor in Stemcor undergoing a major restructuring that year, with the downsizing of a number of less profitable business units and product lines. It returned to a consolidated group profit in 2017, when it sold 3.7 million mt of materials, and had revenues of $2.11 billion, according to the company website.

Since that time, there has been market talk that Stemcor could find a new owner.

Natixis advised Stemcor’s shareholders on the transaction.

— Diana Kinch