Alba seeks strategic investor for majority stake in metals recycling business

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Alba seeks strategic investor for majority stake in metals recycling business

Alba Group is putting its ferrous and non-ferrous metals recycling business up for sale. The German company is considering a sale of shares in its publicly listed subsidiary Alba SE as well as the possibility of taking on a strategic investor, according to an announcement made on 9 March. The options being investigated range from a majority stake to a complete divestment. The company said this move comes in response to the significant structural changes expected in the steel industry and metal recycling sector in the coming years.

Alba SE comprises a group of companies active in ferrous and and non-ferrous metals recycling and describes itself as one of the leading processors in Europe. Around 93 per cent of shares in the Cologne-based company are currently owned by Alba Europe Holding, a wholly owned subsidiary of Berlin-based Alba Group, which is in turn owned by the brothers Axel and Eric Schweitzer.

In the group structure, the metals recycling business and thus Alba SE are headed up by Eric Schweitzer. In mid-2021, the two brothers decided to split up the group and alter the ownership structure of the individual divisions (EUWID 16/2021). As part of this restructuring, the group was divided into two units, each owned by one brother: the traditional waste management business and the metals recycling activities went to Eric Schweitzer, while his brother Axel took over the group’s business in Asia and the plastics recycling activities.

According to Eric Schweitzer, the European Green Deal is leading to a structural transformation in the steel industry intended to reduce carbon emissions. As compliance with climate regulation becomes more challenging, the Alba CEO said the steel industry had a “growing interest in securing direct access to scrap and not being reliant on external suppliers”. He added: “We are therefore looking for a strategic investor who would like to acquire a majority of Alba SE and take advantage of organic growth and acquisition opportunities with us.” A full divestment of the investment in Alba SE, potentially via the stock market, is also “conceivable”, the company said. According to Alba, it is necessary to optimise the synergies between scrap processing and metallurgy in order to increase the production of scrap with significantly higher purity.

Ebit better than expected in 2021

 

Alba SE’s recent business performance has been better than expected. After booking double-digit million-euro losses in 2019 and 2020, the company swung back to profit last year. Alba said that its earnings before interest and taxes (Ebit) of €13.4m slightly exceeded expectations, which were in the range of €11-13m.

Alba did not provide any revenue figures. In 2020, with its seven fully consolidated subsidiaries at that time, Alba SE generated revenues of €259m. This represented slightly more than one-seventh of the turnover generated by the entire Alba corporate group in all business areas in Germany, Europe and Asia, which reportedly amounted to €1.9bn in 2020. Alba SE is scheduled to publish its annual report for the 2021 business year on 29 April.

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