Anglo American announces sale of Scaw South Africa to complete its Scaw Metals Group divestment
Anglo American plc ("Anglo American") announces the final stage of the $1.4 billion Scaw Metals Group ("Scaw") divestment with the sale of Scaw South Africa (Pty) Ltd. ("Scaw South Africa"), a leading South Africa based integrated steel maker, to an investment consortium led by the Industrial Development Corporation of South Africa ("IDC") and Anglo American’s partners in Scaw South Africa (Pty) Ltd, being Izingwe Holdings (Pty) Limited, Shanduka Resources (Pty) Limited and the Southern Palace Group of Companies (Pty) Limited (collectively "the Consortium"), for a total consideration of R3.4 billion ($440 million) on a debt and cash free basis.
This transaction follows the sale of Scaw’s international businesses, Moly-Cop and AltaSteel, to Onesteel in December 2010 for a total consideration of $932 million on a debt and cash free basis. In aggregate, the total consideration achieved from the sale of all Scaw’s businesses has amounted to $1.4 billion on a debt and cash free basis.
Cynthia Carroll, Chief Executive of Anglo American, said: "The sale of Scaw brings the total announced proceeds from our divestments of non-core assets to $3.7 billion since 2010, maximising value from these businesses for our shareholders. I am particularly pleased that the manner in which we conducted this divestment reinforces our ongoing commitment to South Africa. This acquisition will contribute positively to the South African government’s industrial development objectives by enabling the IDC to play a meaningful role in the strategically important steel industry. I wish to thank the management team and employees at Scaw for their support during this process and wish them all the best under the ownership of the Consortium."
Geoff Qhena, Chief Executive Officer of the IDC, said: "The IDC endeavours to promote the establishment of domestic-based manufacturing industries, supporting the infrastructure expansion programmes of both Eskom and Transnet. In this regard, Scaw South Africa is well positioned to take advantage of long term growth trends in the mining industry, as well as in the railway and power generation sectors, and is aligned to our primary objective of creating balanced, sustainable economic growth in South Africa and across the African continent."
Sipho Pityana, Chairperson of Izingwe Holdings (Pty) Ltd. and representing Anglo American’s partners in Scaw South Africa, said: "This transaction provides an excellent platform for the strategic positioning of a BEE player in the manufacturing sector, in line with the new and emboldened approach of government, and affords us an opportunity to gradually increase black participation in the asset. We commend Anglo American for demonstrating a readiness to embrace the above transformation vision by allowing us, as their partners in Scaw, to buy their interest in the business with suitable partners and we are grateful to the IDC and the government for their strong support."
The transaction is subject to customary closing conditions such as regulatory approvals in South Africa including but not limited to competition clearance, and is expected to be completed during the course of 2012. Further announcements will be made in due course, as appropriate.