Subject to shareholder approval, the merger with New York-listed Metal Management Inc will provide the newly renamed Sims Metal Management with 53 metal recycling facilities across 17 states in the US.
The merger creates a strong North American business positioned for future growth with a US listing that can facilitate future consolidation in the region and globally.
Jeremy Sutcliffe, Sims Group
In particular, this will strengthen Sims' presence in a number of major metropolitan areas including the Chicago-Detroit area as well as in the Southern States. Metal Management is seen as having a strong domestic trading platform, but with the facility to export material.
Following a string of acquisitions including Hugo Neu in 2005 (see letsrecycle.com story), the move announced yesterday will mean that globally, Sims Metal Management will become the largest listed metal recycler with a market value estimated at £2.8 billion.
The next largest, US firm Schnitzer, has a market value of less than half of this figure.
Worldwide, Sims will have more than 200 physical operations, managing about 15 million tonnes of recycled metal each year, with sales revenues exceeding £4.2 billion. Globally, the merged Sims Metal Management will see 65% of its sales in ferrous trading, with 26% from non-ferrous trading.
Some 1,900 employees from Metal Management will join the 3,500 employees of Sims Group worldwide.
The merger is expected to be completed in the first quarter of 2008, and will see Sims' headquarters moving to New York. The company will continue to be listed on the Australian stock exchange, but the Metal Management side of the business will have shares trading on the New York stock exchange.
Positioning
Jeremy Sutcliffe, chief executive of Sims Group, who will continue as an executive director of Sims Metal Management and chairman of Sims' European and Australian operations until at least October 2009, said: “This merger is the next phase in our global growth strategy.
“Sims and Metal Management complement each other both in terms of asset base as well as management composition. The merger creates a strong North American business positioned for future growth with a US listing that can facilitate future consolidation in the region and globally,” Mr Sutcliffe added.
Daniel Dienst, who is chairman, president and chief executive of Metal Management, will become Group chief executive of the combined North American business as well as global responsibility for marketing, said of the deal that the synergies and growth opportunities were “significant” through the merger.
“With the entrepreneurial cultures of Sims and Metal Management, the combined group is extremely well-placed to capitalise on future opportunities,” he said.
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