Industry: Control of one of Luxembourg’s leading engineering firms has passed to German investors.
German industrial group SMS Holding has completed a deal making it majority shareholder of Luxembourg engineering firm Paul Wurth, which builds blast furnaces for ArcelorMittal and several other international competitors.
SMS acquired 59% of Paul Wurth, including 48% from ArcelorMittal and other shares from Luxembourg investment firm Luxempart. The deal closed on Monday, Paul Wurth disclosed in a statement.
“Paul Wurth will continue to operate as an independent company within the SMS group,” the subsidiary said. The unit employs more than 1,500 worldwide and “sales of some €500 million are expected in the current year,” it reported.
The Düsseldorf-based group specialises “in plant and machinery construction for steel and nonferrous metals processing,” with more than 11,000 staff and turnover of approximately €3 billion.
With complementary product lines, “the merger creates the basis for the further growth of both companies.”
The deal was first rumoured in May, after ArcelorMittal, the world’s largest steelmaker, announced plans to divest “non-core” assets to help it tackle slowing growth in global demand for steel, industry-wide production overcapacity in Europe, and increased debt levels.
In its quarterly earnings announcement on October 31, ArcelorMittal announced an operating loss of $49 million, that steel shipments were down 8.3%, and that its net debt rose by $1.2 billion, to a total of $23.2 billion.
In November, Moody’s Investors Service downgraded the world’s largest steel firm’s main credit score on Monday from Baa3 to Ba1, moving it from from the “investment grade” to “speculative grade” category.
The Grand Duchy still holds 41% of Paul Wurth, directly and through stakes owned by state-run investment firm SNCI and state-owned bank BCEE.