Bekaert accelerates growth strategy in steel rope markets
Bekaert, a worldwide technology and market leader in steel wire transformation and coatings, has reached an agreement with Arrium Ltd for the acquisition of its wire ropes business in Newcastle, Australia. The integration of the Australian ropes activities will enhance Bekaert's growth strategy in steel wire ropes in general and will enable the Group to take a leading global market position in mining ropes in particular.
Deal scope and structure
The acquisition agreement includes the purchase by Bekaert of Arrium Ltd's steel ropes business. The deal includes all of the personnel and assets of the business located in Newcastle, Australia. The transaction is estimated to add € 40 million to Bekaert's consolidated sales on an annual basis, has an enterprise value of approximately € 60 million and is subject to customary closing conditions. Bekaert and Arrium anticipate a deal closing in the course of the first quarter of 2015.
Upon deal closure, the Australian ropes activities will be integrated in the Bekaert Rope Group. In this newly established Group, Bekaert and their Chilean partners, through Matco Cables SpA, now hold 65% and 35% respectively of all ropes entities in Canada, Chile, Peru, Brazil and the US.
Bekaert steel wire ropes activities
Bekaert is gradually expanding its steel wire ropes platform to serve mining, oil & gas, lifting equipment and infrastructure markets with high performance ropes. The platform's strategy targets both organic and acquisitive growth in markets with interesting potential where Bekaert's core competences, global reach and service model offer a differentiating lever to the industry. Bekaert's ropes platform has been steadily growing over the past years and covers manufacturing and development facilities in Canada, Chile, Peru, Venezuela, Brazil, US, China and Malaysia. The announcement of today fits within Bekaert's strategy to grow this business together with the company's existing Chilean partners.
Arrium's wire ropes activities
The wire ropes division of Arrium is a leading manufacturer of mining wire ropes and has a long history of rope-making in Australia. With 90 years of experience, it is a trusted supplier of high performance ropes to the mining industry in particular. The business employs more than 100 people, all operating in Newcastle, Australia. Arrium is an international diversified mining and materials company with key businesses in mining, mining consumables and steel.