Sims merges with Metal Management

Archiv – Sims Group Ltd is set to become the world’s largest listed metal recycling company after signing a deal worth US$ 1.85 billion (Euro 1.31 billon) to merge with Metal Management Inc. of the USA.Australia / United States | Sims Group Ltd is set to become the world’s largest listed metal recycling company after signing a deal worth US$ 1.85 billion (Euro 1.31 billon) to merge with Metal Management Inc. of the USA.
According to Sims, the proposed merger is consistent with its strategy of growing its core metal recycling division internationally while also developing an innovative recycling solutions division. ’It represents the next step in Sims’ goal of building the world’s leading recycling company with a strong management team to deliver on global growth,’ says Sims’ Chairman Paul Mazoudier.
Under the merger agreement, Sims will issue Metal Management stockholders with 2.05 of Sims’ American Depositary Receipts (ADRs) for each Metal Management share. An ADR is equivalent to one of Sims’ ordinary shares. Sims Metal Management will remain headquartered in Australia, and will retain its ASX listing as well as the New York Stock Exchange listing of its ADRs. The merger values Metal Management’s common stock and equity at US$ 57.73 and US$ 1.5 billion respectively.
Metal Management is one of the largest full-service metal recyclers in the USA with 53 recycling facilities located in 17 states, and it is publicly listed on the New York Stock Exchange. Sims says the combined group will have a sound financial position from which to grow both in North America and globally. ’The directors believe that synergies of approximately US$ 35 million can be achieved during the full 2009 financial year,’ he says. The transaction is mildly accretive on a pre-synergy earnings per share basis for the financial year just ended. All outstanding restricted shares in Metal Management will vest upon completion of the transaction.
The merger is subject to several conditions, including: the approval of Metal Management’s shareholders, which is expected at a meeting in the first quarter of 2008; and also Sims’ shareholders approval at an upcoming annual general meeting of an increase in the cap on non-executive director fees to accommodate the Metal Management nominees and other regulatory consents.
Sims’ Chief Executive Jeremy Sutcliffe will continue as an Executive Director reporting to the new board until at least October 2009, and will chair Sims’ metals recycling operations in Australasia and Europe, as well as Sims Recycling Solutions globally. Metal Management’s current President, Chairman and Chief Executive Daniel Dienst will become Sims Metal Management’s Group Chief Executive and will chair the combined North American metals recycling businesses. In addition, he will have overall responsibility for global marketing.