SSAB’s subsidiary Tibnor has now comleted the acquisition of the steel distribution business of the Danish company Sanistål A/S, Denmark’s second largest steel distributor. The acquisition was announced in November 2018 and was approved by the Danish competition authority in March 2019. The acquisition supports SSAB’s strategic target to strengthen its Nordic home market position. The steel distribution business acquired had sales of around SEK 1.9 billion in 2018.
The acquisition of Sanistål’s steel distribution business completes Tibnor’s Nordic footprint by increasing our market presence in Denmark, where we had not been so visible. The product offering of Tibnor and Sanistål complement each other well, and we see substantial synergy potential,” says Mikael Nyquist, President of Tibnor.
A cornerstone of SSAB’s strategy is leadership in the Nordic home market. SSAB’s subsidiary Tibnor plays an important role in maintaining this position. Steel distribution channels today account for more than half of the total Nordic steel market. The Sanistål acquisition will considerably improve the position of Tibnor in Denmark. For SSAB, a stronger steel distribution channel provides an attractive channel to grow steel sales, and will also improve the ability to manage business cycles.
Based on the acquisition, SSAB and Tibnor expect annual synergies of approximately SEK 50 million to be realized within three years, in addition to strengthening the platform for SSAB’s Nordic steel business and increasing working capital efficiency. Tibnor acquired Sanistål’s steel distribution business as an asset deal at net value of approximately SEK 630 million. The acquisition is expected to be earnings and cash flow accretive from closing.
The acquisition includes Sanistål’s modern and highly automated steel distribution center (42,000 m2) in Taulov and four other sales offices in Denmark as well as a sales office in Latvia. Around 130 employees will transfer to Tibnor as part of the transaction.