Sims Group acquires Hugo Neu Corp.

Archiv – Australia-based Sims Group – the world’s largest metals recycler with companies in Australia, New Zealand, Europe and the USA – has announced an agreement to merge its metal recycling operation with New York City-based Hugo Neu Corporation. The merger, which is expected to be completed by the early autumn, follows the dissolution of a joint venture arrangement between Hugo Neu and Schnitzer Steel.Australia-based Sims Group – the world’s largest metals recycler with companies in Australia, New Zealand, Europe and the USA – has announced an agreement to merge its metal recycling operation with New York City-based Hugo Neu Corporation. The merger, which is expected to be completed by the early autumn, follows the dissolution of a joint venture arrangement between Hugo Neu and Schnitzer Steel.
The combined company will go by the name Sims Newco and, according to Sims, will be the largest metal recycler in the world based on market capitalisation. Under the terms of the merger agreement, existing Sims Group shareholders will receive a 74% interest in the new Sims Group company, while Hugo Neu Corp. will hold a 26% interest and become the largest single shareholder worldwide. The merger values Hugo Neu Corp. at approximately US$ 500/’‚¬ 416 million.
The US management team will be headquartered in New York City with key senior management from Sims USA and Hugo Neu. The merger will also create a new division – Hugo Neu Recycling – to handle post-consumer recycling operations, including New York City’s landmark metal, glass and plastic recycling programme.
Sims Group’s Chief Executive Jeremy Sutcliffe will become Chairman of the US division – Sims Hugo Neu Company LLC – while former Hugo Neu Corp. Chairman John L. Neu will serve as Vice Chairman of the US operations; Mr Neu is also to be Vice Chairman of Sims Group worldwide. President of Hugo Neu Corp. Donald W. Hamaker becomes Chief Executive Officer of the combined US operations while Sims USA’s President Rick Jansen becomes President and COO for the combined businesses. Jeffrey P. Neu remains as General Manager of Sims Hugo Neu Company’s Los Angeles operation.
Hugo Neu is one of the largest US scrap exporters, handling around 20% of all the ferrous scrap shipped from the nation’s deep-water ports. Hugo Neu operates two large deep-water ports – one in the Los Angeles area and the other out of the New York/New Jersey port area. In addition, the company has 15 scrap metal collection and processing facilities. According to a press announcement from Sims Group, privately-owned Hugo Neu had sales of around US$ 1.35 billion last year.
Sims Newco will have more than 120 physical operations around the world handling a combined volume of more than 9 million tonnes of scrap. Earnings by operating region are given as follows: USA and Canada, 60%; Australia and New Zealand, 25%; and the UK and Europe, 15%. It is estimated that export sales account for 65% of the total and domestic sales 35%.
Sims Group’s core business is metal recycling, with an emerging business in recycling solutions. Headquartered in Australia, Sims Group currently earns around 60% of its revenue from international operations in the UK, North America, New Zealand and Asia. Sims has over 2400 employees and an annual turnover exceeding A$ 2.5 billion (US$ 1.9/’‚¬ 1.6 billion).