Swedish steel group SSAB Svenskt Stal AB (SSAB) has announced that it has signed an agreement with North American steel pipe producer IPSCO to acquire the company for a total equity value of $7.7 billion.
The transaction, which has been approved by the BoDs of both companies, will also be subject to certain regulatory approvals.
SSAB said it expects to generate after-tax synergies of around SEK 600 million (approx. $89 million) a year from the acquisition, most of which is expected to be within the next two years.
Commenting on the acquisition, David Sutherland, IPSCO president and CEO, stated, "This transaction delivers significant value to IPSCO's shareholders. It also joins IPSCO with a leading player in the global steel industry and reinforces our already solid position as a leading supplier of steel plate and energy tubulars in North America."
On the other hand, Olof Faxander, SSAB president and CEO, said, "The acquisition of IPSCO represents a further step in SSAB's 2010 strategy towards global leadership in value added steel. Through this transaction, SSAB will accelerate its growth and acquire a platform for future expansion and market presence in North America. The transaction will result in an immediate and significant accretion to SSAB's earnings and cash flow, bringing significant strategic and financial benefit to SSAB."