Sweden’s SSAB tells Kallanish that its subsidiary Tibnor has agreed to acquire the steel distribution business of the Danish company Sanistål A/S, Denmark’s second largest steel distributor. This supports SSAB’s strategic target to strengthen its Nordic home market position, the steelmaker says.
Sanistål’s steel distribution business had sales of around SEK 1.8 billion ($199m) in 2017 and the transaction is expected to close in the early part of the second quarter of 2019. The deal is subject to the approval of the Danish competition authority, SSAB confirms.
“Acquisition of Sanistål’s steel distribution business will complete Tibnor’s Nordic footprint by increasing our market presence in Denmark, where we currently are not so visible. The product offering of Tibnor and Sanistål complement each other well, and we see substantial synergy potential,” says Tibnor president Mikael Nyquist.
The acquisition will considerably improve the position of Tibnor in Denmark. For SSAB, a stronger steel distribution channel provides an attractive channel to grow steel sales, and will also improve the ability to manage business cycles, the steelmaker says.
Tibnor is acquiring Sanistål’s steel distribution business as an asset deal at net value of approximately SEK 630 million. The acquisition is expected to be earnings and cash flow accretive from closing, SSAB adds. Based on the acquisition, SSAB and Tibnor expect annual synergies of approximately SEK 50 million to be realised within three years.
The acquisition includes Sanistål’s steel distribution centre (42,000m²) in Taulov and three other sales offices in Denmark as well as a sales office in Latvia. As part of the transaction, around 130 employees will transfer to Tibnor.
