Anglo American announced the final stage of the $1.4 billion Scaw Metals Group divestment with the sale of Scaw South Africa to an investment consortium led by the Industrial Development Corp. of South Africa (IDC) for R3.4 billion ($440 million). 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.
Scaw Metals Group is a leading South Africa-based integrated steel maker producing highly specialized and critical consumable components, including high chrome and forged grinding media; wire rope and chain; cast steel products as well as low and high carbon long steel products. In addition to Scaw South Africa, the business holds interests in several steel-related businesses serving sub-Saharan Africa.
This transaction 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, explained Cynthia Carroll, CEO, Anglo American.
Owned by the South African government under the supervision of the Economic Development Department, the IDC is a national development finance institution set up to promote economic growth and industrial development in South Africa and across the rest of the African continent.
“The IDC promotes the establishment of domestic-based manufacturing industries, supporting the infrastructure expansion programs of both Eskom [South African electric utility] and Transnet [South African railroad],” said Geoff Qhena, CEO, IDC. “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.”
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.