SSAB makes $7.7 Billion Dollar bid for Ipsco

Swedens' SSAB has announced that it has made a formal bid for Canadian Steelmaker Ipsco.

The following announcement is from Ipsco's website:-

LISLE, Ill., and STOCKHOLM, Sweden, May 3 /PRNewswire-FirstCall/ -- IPSCO Inc. (NYSE/TSX: IPS) and SSAB Svenskt Stal AB (STO: SSAB.A, SSAB.B) today announced that they have entered into an agreement providing for IPSCO to be acquired by SSAB for U.S. $160 per share in cash for a total equity value of U.S. $7.7 billion. The transaction has been approved by the Boards of Directors of both companies. The closing of the transaction is not conditional on SSAB obtaining financing. The transaction will be completed by way of a plan of arrangement under applicable Canadian law. It will require the approval of 66 2/3% of the votes cast by shareholders of IPSCO at a special meeting to be called to consider the arrangement, as well as court approval ruling on the fairness of the transaction. The transaction will also be subject to certain other customary conditions.

SSAB has received commitments for bank financing of the acquisition. SSAB intends to pursue a SEK 10 billion rights offering during 2007.

The transaction is expected to be accretive for SSAB and to generate annual post tax synergies of SEK 600 million, with the major part to be realized in the next two years.

IPSCO President and Chief Executive Officer, David Sutherland 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. SSAB is a highly regarded company with a first- rate work force that shares many similar values with IPSCO, including a commitment to quality products, workplace safety, and manufacturing excellence. As part of this new, larger company, we will have a more diversified product offering that will enhance our ability to better serve both existing and new customers."

SSAB President and Chief Executive Officer, Olof Faxander, 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."

Technorati tags: IPSCO, SSAB, Steel industry