Brazil’s Magnesita Announces Acquisition of German LWB Refractories
SAO PAULO, Brazil: Magnesita Refratarios SA, Latin America’s largest maker of specialty tiles used in steel blast furnaces, says it will pay 277 million euros ($394 million) in cash and stock to to buy LWB Refractories a German company that makes products used in the steel industry.
Magnesita said the purchase will turn it into the world’s third largest producer of refractory material.The deal will almost double Magnesita’s annual sales to about 900 million euros, The purchase boosts output capacity to 1.1 million metric tons a year, and Magnesita is seeking to further expand through more acquisitions and investments in existing facilities, Chief Executive Officer Ronaldo Iabrudi said.
“Even if we see a slight slowdown in steel demand growth, refractories demand is still set for significant growth,” Iabrudi said. “The LWB expansion gives us the opportunity for considerable growth in China, where we plan to double capacity of the existing LWB refractories plants to 180,000 tons a year.”
Magnesita rose 85 centavos, or 4.8 percent, to 18.45 reais in Sao Paulo trading, the biggest gain since Aug. 20.
Magnesita said its deal to buy LWB from Rhone Capital also includes the assumption of €380 million in debt and that the conclusion of the deal is subject to regulatory approval.
Magnesita Refratarios S.A., is a private mixed capital company dedicated to mining, producing and marketing an extensive line of refractory materials. Its products are used mainly by the steel, cement, aluminum and glass industries. Its industrial activities started in 1940, shortly after magnesite deposits were discovered in Brumado, Bahia State. It currently has ten operating units in Brazil and one in Argentina. The Company is the market leader in Brazil and South America and exported to 70 countries in 2007.