Latest News from GFG Alliance
Tuesday 4th July 2017Press Release Mining Steel
Sanjeev Gupta’s GFG Alliance, the international industrial, energy, natural resources and financial services group, has today signed a binding agreement to acquire Arrium, the integrated Australian mining and steel business, out of administration.
The acquisition is expected to secure the jobs of over 5,500 Australian workers, and includes the following steel and steel-related businesses.
The acquisition of Arrium builds on GFG Alliance’s track record of acquisitions and turnarounds in the UK where it is now a key player in the industrial, energy, property and financial sectors. To date the group has secured the jobs of more than 4,000 industrial workers in the UK through its Liberty House (steel, aluminium and engineering), SIMEC (energy, infrastructure and resources), GFG Estates and Wyelands (banking, capital and advisory) businesses.
Sanjeev Gupta, Executive Chairman of the GFG Alliance said: “I am thrilled to announce this landmark deal to acquire Arrium, establishing the GFG Alliance as a major participant in Australia’s industrial landscape.
“We have a vision to create a vertically integrated and sustainable industrial business that encompasses mining, metal recycling, primary metal production, engineering and distribution, and which also includes the use of renewable energy consistent with our GREENSTEEL strategy. We aim to leverage the advantages of integration across the value chain, from raw materials and metal production to high-end engineered products, coupled with supply chain and value added financial solutions.
“The Arrium business fits perfectly with this strategy and we believe it has an exciting future leveraging our GREENSTEEL vision which has been well proven in the UK. The acquisition will secure the jobs of over 5,500 Australian workers, a similar number to that which GFG Alliance has saved in the UK.
“Looking forward, we will continue to explore opportunities to further grow our presence in Australia in adjacent and complementary industries, including renewable energy, metals and mining.
“I would like to thank all stakeholders who have worked tirelessly alongside me for over a year on this acquisition. I would also like to thank both the Federal and South Australian Governments for their proactive and collaborative partnership with us in seeking solutions to the challenges faced by the Arrium businesses.”
Michael Morley, Development Director for the GFG Alliance said: “Arrium is well placed to play a significant role in the expected growth in infrastructure spending in Australia over the coming years. The business is endowed with an experienced and skilled workforce, well-run operations, strong brands and long-established customer relationships and we look forward to exploring opportunities to grow the business further.
“Whilst the Whyalla Steelworks has faced well-publicised operational and financial challenges over recent years, we have developed a comprehensive plan to secure its long-term future and that of the local community. Our plan focuses on reducing the cost of iron ore feed, targeted modernisation investments, energy generation, expanding production and creating high value export opportunities. We are particularly excited by the opportunity for the Whyalla Steelworks to directly supply intermediate steel products to our UK rolling mills that are currently sourced from third parties. Whilst our plan remains subject to reaching agreement with Government, we have had regular and constructive discussions with both the Federal and South Australian Governments throughout the sale process and look forward to continuing those discussions now the acquisition has been agreed.”
The binding agreement is subject to limited conditions only, including approval by the Committee of Creditors and approval by Australia’s Foreign Investment Review Board. Completion is expected to occur on 31 August 2017.
Lois Brearley – iNHouse Communications