Swedish steelmaker SSAB to buy Finland’s Rautaruukki

The combined company will have significant synergy potential and a steel production capacity of 8.8 million tons.

The Swedish company SSAB AB and Finland’s Rautaruukki Oyj have announced a plan to combine the two companies through SSAB making a EUR 1.1 billion public share exchange offer to Rautaruukki’s shareholders. According to SSAB, the combined company will have a competitive position and product offering within high strength steels, standard strip and plate products as well as tubular products. With production facilities in Sweden, Finland and the United States, the company will have a combined annual steel production capacity of 8.8 million tons.

Martin Lindqvist, President and CEO of SSAB, says that the proposed combination of SSAB and Rautaruukki is based on clear industrial logic. “The identified synergies will significantly improve the efficiency and industrial flexibility of the combined company. 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,” he says.

Strengthening competitiveness

According to Rautaruukki, the combination of the two companies will enhance the ability to invest in product development, R&D and close collaboration with customers. The construction businesses of both companies – Ruukki Building Products and Ruukki Building Systems as well as SSAB’s Plannja – will also be combined to form a separate and focused business unit. The preliminary combined sales of the combined company in 2012 amounted to about EUR 7.3 billion.

“For us in Rautaruukki this is a natural strategic step which will improve focus and productivity and safeguard a world-class Nordic steel industry. The synergy potential both in steel and construction is significant and offers an excellent platform for improved operations and results,” says Kim Gran, Chairman of Rautaruukki’s Board of Directors.

Sources: SSAB, Rautaruukki, Yle