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IPSCO to be
Acquired By SSAB for U.S. $160 Per Share For a Total Equity Value of U.S. $7.7
Billion
Lisle, Illinois, and Stockholm, Sweden, May 3, 2007 - IPSCO Inc. and SSAB
Svenskt Stal AB today announced that they have entered into an agreement
providing for IPSCO to be acquired by SSAB for U.S. $160 per share in cash for a
total equity value of U.S. $7.7 billion. The transaction has been approved by
the Boards of Directors of both companies. The closing of the transaction is not
conditional on SSAB obtaining financing. The transaction will be completed by
way of a plan of arrangement under applicable Canadian law. It will require the
approval of 66 2/3% of the votes cast by shareholders of IPSCO at a special
meeting to be called to consider the arrangement, as well as court approval
ruling on the fairness of the transaction. The transaction will also be subject
to certain other customary conditions.
SSAB has received commitments for bank financing of the acquisition. SSAB
intends to pursue a SEK 10 billion rights offering during 2007.
The transaction is expected to be accretive for SSAB and to generate annual post
tax synergies of SEK 600 million, with the major part to be realized in the next
two years.
IPSCO President and Chief Executive Officer, David Sutherland stated, "This
transaction delivers significant value to IPSCO's shareholders. It also joins
IPSCO with a leading player in the global steel industry and reinforces our
already solid position as a leading supplier of steel plate and energy tubulars
in North America. SSAB is a highly regarded company with a first- rate work
force that shares many similar values with IPSCO, including a commitment to
quality products, workplace safety, and manufacturing excellence. As part of
this new, larger company, we will have a more diversified product offering that
will enhance our ability to better serve both existing and new customers."
SSAB President and Chief Executive Officer, Olof Faxander, said, "The
acquisition of IPSCO represents a further step in SSAB's 2010 strategy towards
global leadership in value added steel. Through this transaction, SSAB will
accelerate its growth and acquire a platform for future expansion and market
presence in North America. The transaction will result in an immediate and
significant accretion to SSAB's earnings and cash flow, bringing significant
strategic and financial benefit to SSAB."
"We are very excited about this opportunity to combine two of the most
successful and profitable steel companies in the world. IPSCO's state-of-the-
art facilities and their world-class effectiveness in combination with SSAB's
leading technology, unique product and process capabilities and first-class
service model will create value for our customers and our shareholders,"
Olof Faxander continued.
IPSCO's lead financial advisor was Goldman, Sachs & Co., and RBC Capital
Markets was co-advisor. IPSCO was represented by Davis Polk & Wardwell and
Osler Hoskin & Harcourt LLP.
Greenhill & Co., LLC is acting as lead financial advisor, and Handelsbanken
Capital Markets is acting as co-financial advisor to SSAB. White & Case LLP
is acting as U.S. counsel to SSAB, Bennett Jones LLP is acting as Canadian
counsel to SSAB.
IPSCO is a leading producer of energy tubulars and steel plate in North American
with an annual steel making capacity of 4.3 million tons. IPSCO operates four
steel mills, eleven pipe mills, and scrap processing centers and product
finishing facilities in 25 geographic locations across the United States and
Canada. The Company's pipe mills produce a wide range of seamless and welded
energy tubular products including oil & gas well casing, tubing, line pipe
and large diameter transmission pipe. Additionally, IPSCO is a provider of
premium connections for oil and gas drilling and production. IPSCO trades as
"IPS" on both the New York and Toronto Stock Exchanges.
SSAB is a Swedish based publicly traded corporation with a leading European
position in Quenched & Tempered heavy plate and EHS/UHS steel sheet. The
Group comprises four divisions: Division Sheet and Division Heavy Plate are the
steel operations with steel shipments of 3.1 million metric tonnes in 2006,
Plannja is a processing company in building products, and Tibnor is the Group's
trading arm supplying a broad product range of steel and metals. The Group has
sales revenues of almost US$ 4.6 billion. SSAB has 8,800 employees and has
operations or offices in over 40 countries and a worldwide sales presence.
Forward-looking Statements
This press release contains forward looking statements within the meaning of
Section 27A of the Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended, and under Canadian securities law.
The words "believe", "expect", "will",
"can" and other expressions that are predictions of or indicate future
events, trends or prospects and which do not relate to historical matters
identify forward-looking statements. Although IPSCO and SSAB believe the
anticipated future results, performance or achievements expressed or implied by
the forward-looking statements and information are based upon reasonable
assumptions and expectations, the reader should not place undue reliance on
forward-looking statements and information because they involve known and
unknown risks, uncertainties and other factors which may cause the actual
results, performance or achievements of the IPSCO or SSAB to differ materially
from anticipated future results, performance or achievements expressed or
implied by such forward-looking statements and information. Factors that could
cause actual results to differ materially from those contemplated or implied by
forward-looking statements include: weather conditions affecting the oil patch;
drilling rig availability; demand for oil and gas; supply, demand and price for
scrap metal and other raw materials; supply, demand and price for electricity
and natural gas; demand and prices for products produced; general economic
conditions; a significant change in the timing of, or the imposition of any
governmental conditions; the extent and timing of our ability to obtain revenue
enhancements and cost savings following the transaction; changes in financial
markets, the actions of courts, government agencies, and other third parties,
SSAB's ability to implement successfully its plans and other factors. These and
other factors with respect to IPSCO are outlined in IPSCO's regulatory filings
with the Securities and Exchange Commission and Canadian securities regulators,
including those in the IPSCO's 2006 Form 10-K, and its MD&A, particularly as
discussed under the heading "Risk Factors". These forward-looking
statements speak only as of the date of this press release. Neither IPSCO nor
SSAB undertakes any obligation to publicly update or revise any forward-looking
statements or information, whether as a result of new information, future events
or otherwise, except as may be required by applicable securities laws.
Important
This press release is for information only and does not constitute an offer to
issue or sell, or the solicitation of an offer to acquire or buy, shares and
rights to subscribe for shares to any person in any jurisdiction.
THE MATERIAL SET FORTH HEREIN IS FOR INFORMATIONAL PURPOSES ONLY AND IS NOT
INTENDED, AND SHOULD NOT BE CONSTRUED, AS AN OFFER TO SELL, OR AS A SOLICITATION
OF AN OFFER TO PURCHASE, ANY SECURITIES. THE SECURITIES DESCRIBED HEREIN HAVE
NOT BEEN AND WILL NOT BE REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT"), OR THE LAWS OF ANY STATE, AND MAY NOT
BE OFFERED OR SOLD WITHIN THE UNITED STATES, EXCEPT PURSUANT TO AN EXEMPTION
FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT AND APPLICABLE STATE LAWS.
Additional Information and Where to Find It
This communication is being made in respect of the proposed plan of arrangement
involving SSAB and IPSCO. In connection with the proposed transaction, IPSCO
will file with the United States Securities and Exchange Commission
("SEC") a preliminary proxy statement on Schedule 14A regarding the
proposed plan of arrangement. The information contained in this preliminary
filing will not be complete and may be changed. Before making any voting or
investment decisions, investors and security holders are urged to read the
definitive proxy statement when it becomes available and any other relevant
documents filed with the SEC because they will contain important information.
The definitive proxy statement will be sent to the shareholders of IPSCO seeking
their approval of the proposed transaction. In addition you may obtain this
document free of charge at the website maintained by the SEC at http://www.sec.gov.
Also, you may obtain documents filed with the SEC by IPSCO free of charge by
requesting them in writing from 650 Warrenville Road, Suite 500, Lisle, Illinois
6053, or by telephone at (630) 810-4800.
Participants in the Solicitation
IPSCO and its directors and executive officers and other members of management
and employees may be deemed to be participants in the solicitation of proxies in
respect of the proposed transaction. Information regarding IPSCO's directors and
executive officers is available in IPSCO's proxy statement for its 2007 annual
meeting of shareholders, which was filed with the SEC on March 8, 2007.
Information regarding the persons who may, under the rules of the SEC, be
considered participants in the solicitation of IPSCO shareholders in connection
with the proposed transaction will be set forth in the preliminary proxy
statement when it is filed with the SEC.
Contact:
Tom Filstrup
Director of Investor Relations of IPSCO,
630-810-4772
or
Ulrika Ekstrom
Head of Corporate Communications
46 8-45 45 734 or, +46 703-98 54 52
or
Stefan Lundewall
Head of Investor Relations
46 8-45 45 729, +46 70-508 28 57, both of SSAB
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