Finland-based stainless steel producer Outokumpu has announced that it has completed the acquisition of Inoxum,the stainless steel unit of the German steel giant ThyssenKrupp.The new Outokumpu starts operations on December 29,2012,with a new structure and leadership.
The company stated that the transaction enables a strategic optimization of production capacities,production locations and supply routes.The acquisition is expected to create significant annual cost savings of€200 million,with€50 million expected in 2013 and the remaining€150 million in 2014,from planned mill closures,higher utilization rates,economies of scale in raw material purchasing,and streamlining of sales,service centers,IT and other general costs.
The new Outokumpu will also benefit from its own chrome mine and related ferrochrome production,which bring the company a significant cost advantage over other stainless manufacturers.Additionally,the combined has annual a cold rolling capacity of approximately 2.8 million mt.
According to Outokumpu,in order to achieve the targeted efficiency increases,the combined entity plans to reduce its melting capacity by approximately 1.4 million mt.According to the agreement announced in January 2012,Krefeld meltshop will be shut down by the end of 2013 and it is envisaged that the meltshop in Bochum will be closed by the end of 2016,pending a final review of its financial performance in 2015.Furthermore,Outokumpu is considering a reduction of thin cold rolling capacity in Sweden from 2014 onwards.
As a result of the Inoxum transaction ThyssenKrupp has become a major shareholder in Outokumpu through directed share issue,holding 29.9 percent of shares.
