South Africa's Industrial Development Corporation has finalised its 74% acquisition of steel group Scaw from Anglo American. The purchase of the ZAR 3.4 billion stake was announced in April on a debt and cash free basis.
This means existing black economic empowerment partners in Scaw will jointly hold 21% in the company. Another 5% will be held by staff through an employee share ownership program.
Scaw produces beneficiated steel consumables for mining, rail, power, oil and gas, construction, and other industrial sectors.
Mr Abel Malinga divisional executive of mining and manufacturing at the IDC said that "It is critical to maintain and deepen the industrialization of the economy by refocusing the beneficiation strategy to support manufacturing. The purchase put the IDC in a position to invest in Scaw and grow its operations. The acquisition afforded the country an opportunity to improve trade within Africa, supplying mining consumables and rail infrastructure. High steel input costs inhibit the development of a robust and sustainable downstream steel fabrication industry, to the detriment of job creation. Scaw has the potential to be a key supplier to government's planned ZAR 4 trillion infrastructure program over 15 years, and would be grown into a global steel player."
Mr Christopher Davis CEO of Scaw said the buyout heralded a new chapter" for Scaw. "Under the strategic leadership of our new owners we are well positioned to capitalise on the … growth potential in the African mining industry, as well as the expansion of rail and power in South Africa and beyond.
In addition to Scaw's South African operations, the business included a 50% interest in CWI, a joint venture with ArcelorMittal South Africa.
