Swedish rolled aluminium firm Gränges AB announced earlier this week that it has obtained clearance from the EU Commission to proceed with its purchase of Polish flat-rolled aluminium producer Aluminium Konin.
Gränges first announced the sale last November, in which it will purchase the Boryszew Group subsidiary for SEK2.3 billion (US$240.8 million). In addition to the purchase price, Gränges agreed to complete a three-year, SEK1.1-billion (US$115 million) expansion program that was first initiated by Boryszew Group. The expansion will boost Aluminium Konin’s capacity to 140 thousand metric tons per annum.
Gränges’ CEO Johan Menckel noted the synergies achieved by its purchase of Aluminium Konin in a press release issued at the time of the announcement.
“Aluminium Konin contributes with technically advanced operations, strategically located in Central Europe. The acquisition is a good strategic fit and complements our business and geographic presence. Together we are creating a strong platform for product mix optimization and sustainable profitable growth. Aluminium Konin strengthens Gränges’ product offering for new niche markets and enables a broader offering of solutions for future vehicles. The acquisition will sharpen our competitive strength and create a stronger position in growing markets to further drive the development of sustainable customer offerings.”
In order to finance the buy, Danske Bank, Nordea Bank, and Svenska Handelsbanken have agreed to provide a SEK2.3-billion bridge loan faculty featuring an 18-month time to maturity. Upon completion of the purchase and related new stock issues, Gränges estimates its new total net debt to total approximately SEK4.3 billion (US$450 million), or 2.6 times adjusted EBITDA.
With regulatory approval now in hand, Gränges says the deal should be concluded by year’s end.
Begun in 1873 in Stockholm, Sweden as Trafik AB Grängesberg-Oxelösund, Gränges AB was resurrected in 2013 as a private company specializing in rolled aluminium heat exchangers. It employs almost 1,800 employees at the present time at two plants – one in Finspång, Sweden, that opened in its present configuration in 1972, and a second in Shanghai, China, opened in 1996. The firm boasts a total nameplate capacity of 420 thousand metric tons per annum and an annual sales total of SEK13 billion (US$1.35 billion).