The Boards of Directors of SSAB and Rautaruukki have announced a plan to combine the two companies through the acquisition of Ruukki by SSAB. The combined company would be a Nordic and US-based steel company “with a global reach and cost-efficient and flexible production”.
Swedish steelmaker SSAB first announced plans to acquire its Finnish competitor in late January, saying it hoped to reduce costs and boost competitiveness in the sluggish steel market. The proposed combination is now expected to achieve annual cost synergies of up to €150 million and provide “substantial value” for shareholders.
“The [merger] is based on clear industrial logic. The identified synergies will significantly improve the efficiency and industrial flexibility of the combined company,” said Martin Lindqvist, President and CEO of SSAB.
“This combination will enable us to do more for our customers, and internally be more flexible in adapting supply to market demand in all periods of the steel business cycle.”
Sakari Tamminen, President and CEO of Rautaruukki, added: “I believe that the combination of Ruukki and SSAB gives an excellent opportunity to continue the rationalization of the cost base of the companies and build a new Nordic steel producer, that is able to transit the steel business towards a global special steel company. Ruukki has moved in this direction and this transaction is a major opportunity to speed up the transition with synergy benefits.
“This demands a successful integration based on the principle of putting the best skills and people in each position. There is also a good synergy potential in the construction business, which offers profitable growth potential on top of the synergy benefits. Ruukki people are used to seeing changes as opportunities.”
SSAB’s Hardox range is particularly well known in Australia and widely used in the manufacture of truck bodies, tipping trays and lightweight chassis. Likewise, Ruukki’s Raex range is widely used in similar applications.