Ruukki South Africa, South African subsidiary of Finnish industrial refining group Ruukki, has announced its acquisition of an 84.9 percent stake in South African ferrochrome producer Mogale Alloys for ZAR 2 billion (about €174 million).
Under the terms of the transaction, Ruukki will pay ZAR 1.2 billion when the contract is closed, with ZAR 1.125 billion going to the vendors and a further ZAR 75 million to be paid into the Mogale Management Trust, set up for the remuneration of Mogale's management.
In its statement regarding the deal, Ruukki said, "The transaction has become effective, other than payment which will be made by May 30, 2009. Ruukki will consolidate the acquired business from June 1, 2009."
The Mogale acquisition is a cornerstone transaction in Ruukki's expansion into South Africa, which is one of the leading areas of minerals production. The Mogale platform will help Ruukki to pursue related acquisitions in various minerals and alloys operations, such as chrome and platinum assets.
Mogale's production facilities are located in the vicinity of Johannesburg in South Africa. It has a total 96 MVA smelting capacity with four furnaces. Mogale produces silicomanganese, ferrochrome and stainless steel alloy, and has a combined annual capacity of about 100,000 mt.