FLSmidth to Acquire thyssenkrupp’s Mining Business for $386 Million
[Click image to enlarge]
FLSmidth and thyssenkrupp Industrial Solutions AG have reached an agreement where FLSmidth will acquire thyssenkrupp’s Mining business (TK Mining) for a total consideration of EUR$325 million ($386,265,163 million) corresponding to approximately DKK$2.4 billion. Closing of the transaction is expected in H2 2022 and is subject to customary approvals from relevant authorities.
TK Mining is a leading full-line supplier of solutions for mining systems, material handling, mineral processing and services, which is highly complementary to FLSmidth’s offering. TK Mining has an asset light business model and is present in 24 countries with engineering and global service centers, and has close to 3,400 employees. The business delivered a high single-digit negative EBIT margin and is expected to return to profitability by year 2024 based on the ongoing restructuring undertaken by TK Mining.
A combination of the two companies will create a leading global mining technology provider with operations from pit to plant, extending the strategic customer relationships with a complementary product offering and customer base as well as improved geographic coverage. TK Mining’s extensive active installed base, together with FLSmidth’s strong existing service setup, will provide additional aftermarket opportunities, while the joint R&D capabilities and combined portfolio will enable accelerated innovation in digitalization and MissionZero solutions. The mining industry is characterized by sound fundamentals and a positive outlook, based on underinvestment over the past decade and increasing demand due to the clean energy transition. The timing of this acquisition positions FLSmidth to capture enhanced value from the mining growth cycle underway.
“TK Mining and FLSmidth are a perfect match, and I am proud to announce this agreement to join forces. This is a truly transformational deal allowing us to accelerate our growth ambitions in mining by creating a stronger talent pool and one of the world’s largest and strongest suppliers to the mining industry. Our complementary customer base and improved geographic coverage will offer a strong value proposition to our customers,” said Thomas Schulz, Group CEO of FLSmidth.
“There is a significant opportunity in transforming TK Mining towards FLSmidth’s business mix and model in which higher margin service business makes up about 60 percent of revenue. I look forward to welcoming TK Mining’s management team and talented staff to our organization,” added Schulz.
“FLSmidth is an excellent owner and a very good new home for our mining activities. The companies have a strong cultural fit and are a good match: the business models are comparable; the technologies complement each other well. The result is a world-leading technology provider from pit to plant. This is also a great opportunity for our employees,” said Martina Merz, Group CEO of thyssenkrupp AG.
“The merged new company will be able to drive innovation and digitalization even faster and will increasingly focus on sustainability and ways to reduce environmental footprint,” added Merz.
The transaction is conditional upon customary regulatory approvals and formal approval by the supervisory board of thyssenkrupp AG and the supervisory board of thyssenkrupp Industrial Solutions AG. The transaction is expected to be completed in H2 2022. Until then the two companies will continue to operate as separate and competing entities.
About FLSmidth
FLSmidth delivers sustainable productivity to the global mining and cement industries. They deliver market-leading engineering, equipment, and service solutions to its customers enabling them to improve performance, drive down costs, and reduce environmental impact. Their operations span the globe and their ~10,600 employees are present in more than 60 countries. In 2020, FLSmidth generated a revenue of DKK$16.4 billion.
To stop by FLSmidth’s website, CLICK HERE
Be in-the-know when you’re on-the-go!
FREE eNews delivery service to your email twice-weekly. With a focus on lead-driven news, our news service will help you develop new business contacts on an on-going basis.
CLICK HERE to register your email address.
Copyright © 2021 Mining Connection LLC. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed without permission.
For licensing permission, .(JavaScript must be enabled to view this email address)
