Finnish stainless steel producer, Outokumpu and the German steelmaker, ThyssenKrupp AG have completed the amalgamation of their stainless steel activities with the acquisition of ThyssenKrupp Inoxum by Outokumpu.
ThyssenKrupp becomes a major shareholder in Outokumpu through a directed share issue, holding 29.9% of the shares. Guido Kerkhoff, CFO of ThyssenKrupp joins the Board of Directors of Outokumpu.
The new company started operations on December 29, 2012 with a new structure and leadership aimed at creating significant annual cost synergies of EUR 200M, of which EUR 50M are expected in 2013, and cumulatively up to EUR 150M by 2014.
The new company has close to 40% of the European market and 12% globally. It also has the broadest portfolio in the industry and technical expertise and customer knowledge making Outokumpu a clear global major in stainless steel and high performance alloys.
Outokumpu now has four business areas – Stainless Coil EMEA, Stainless Coil Americas, Stainless APAC and High Performance Stainless & Alloys. Together these provide the full range of stainless steel products as well as high performance alloys. Outokumpu benefits from having its own chrome mine and related ferrochrome production, which brings the company a significant cost advantage over most other stainless manufacturers.
The combined entity presently has approximately 16900 employees, combined revenues of EUR 9.6bn (based on 2011 pro forma) and annual cold rolling capacity of approximately 2.8Mt. The company is led by CEO Mika Seitovirta.
To achieve the targeted efficiency increases, the combined entity plans to reduce its melting capacity by approximately 1.4Mt. In accordance with the agreement announced on January 31, 2012 among Outokumpu, ThyssenKrupp and the German labour representatives, the Krefeld meltshop will shut 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 will consider a reduction of thin cold rolling capacity in Sweden from 2014 onwards.
The overall global restructuring is expected to result in a reduction of up to 2000 jobs over the next four years. These measures will strengthen the combined entity's financial profile and, in turn, provide greater job security in the future. All changes will be conducted in a socially responsible manner whilst limiting impact on customers.