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ELG to be taken over by stainless steel producer Aperam

Stainless steel clippings, off-cuts and skeleton scrap
Recycling and trading stainless steel scrap, superalloys
and titanium are ELG's core businesses
07.05.2021 − 

Stainless steel recycler ELG is to be sold by its parent group Franz Haniel & Cie to the steel producer Aperam. The three companies announced the signature of a share purchase agreement for an enterprise value of €357m on 6 May. Aperam said that the acquisition of ELG will put it "at the core of the circular economy and enable capturing value in the global recycling industry. Investing in sustainable recycling will further improve Aperam’s leading environmental footprint and support the company’s CO2 reduction targets". The company intends to operate ELG as a fully separate and inde-pendent company. "ELG will continue to serve all of its customers in their best interest," said Aperam CEO Timoteo Di Maulo.

The transaction is still subject to the usual regulatory approvals. The partners expect it to be completed in the second half of this year.

Haniel had announced in March 2020 that the group was "examining potential sales scenarios" for ELG as part of a strategic reorientation. In its earnings report for 2020, Haniel had classified ELG as "discounted operations".

ELG was founded in 1962 and specialises in trading and recycling raw materials for the stainless steel industry and high-performance materials such as superalloys, titanium and carbon fibre, supplying around 1.3 million tonnes of material a year. According to its website, ELG has 51 sites in 20 countries on five continents. Aperam reports in its press release that ELG has 52 sites in 18 countries.

ELG closed 2020 with negative earnings and booked an operating loss of €30m for the year. Parent group Haniel attributed this mainly to the volume- and price-related decline in the operating margin in the superalloys business.

Aperam expects accelerated expansion

ELG’s future owner Aperam produces stainless, electrical and special steel. The group headquar-tered in Luxembourg has its main production sites in Belgium, France and Brazil. Aperam ex-pects the transaction to accelerate its expan-sion into "geographies and industries that are complementary to its current portfolio", according to CEO Timoteo Di Maulo. The company also expects that the take-over will enable it to improve its input mix and to expand into the supply of raw materials. "Total minimum synergies of €24m are expected within three years", Aperam said. The company expects the transaction to be "value creative from year one".

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