Tibnor, a subsidiary of Swedish-Finnish Company SSAB, has announced the completion of the acquisition of Sanistal A/S steel distribution business. Sanistal A/S is a Danish company which is the second largest distributor of steel in Denmark.
The acquisition plan was announced in November 2018 and subsequently approved by the competition authority in Denmark in March 2019. The acquisition is in line with the SSAB strategy to strengthen the home market position in the Nordic region. The acquired steel distribution business of Sanistal reported a sales of SEK 1.9 billion in 2018.
The president of Tibnor Mikael Nyquist said that after the acquisition of the steel distribution business of Sanistal, Tibnor’s Nordic footprint has reached a completion by expanding presence in Denmark where there was a lack of visibility. The products of both the companies complement each other very well and there is also significant potential for synergy.
The company’s strategy is significantly dependent on the Nordic home market leadership. The Tibnor subsidiary of SSAB plays a role of key importance in maintaining this leadership position. The company’s steel distribution business is responsible for half of the Nordic steel market in total. An expanded steel distribution channel is an excellent opportunity to grow the company’s steel sales and improve the management of business cycles.
SEK 50 million worth of annual synergies are expected after the acquisition within the next three years. It will also help increase the working capital efficiency and strengthen the Nordic steel business platform of SSAB. The Sanistal steel distribution business was acquired by Tibnor as an asset at total value of SEK 630 million approximately. Cash glow accretive and earnings are expected after the acquisition closing.
A highly automated and modern steel distribution center of Sanistal with a 42,000 Sq.m expanse in Taulov is part of the acquisition deal along with the four sales offices in Denmark and one Latvian sales office. The transaction will see the transfer of around 130 employees to Tibnor.