Ferroglobe Acquires Glencore European Manganese Plants in France and Norway, Doubling its Global Manganese Alloy Capacity

27 November 2017

Ferroglobe Plc  (“Ferroglobe” or the “Company”) announced today that it has entered into an agreement with a wholly-owned subsidiary of Glencore International AG (“Glencore”) for the acquisition by Grupo FerroAtlántica, S.A. (a wholly-owned subsidiary of Ferroglobe) of a 100% interest in Glencore’s manganese alloys plants in Dunkirk (France) and Mo I Rana (Norway). The parties expect the transaction to close in the first quarter of 2018, subject to obtaining certain regulatory approvals in France, Germany and Poland and other customary conditions.

The acquisition of the Glencore plants in France and Norway represents a unique opportunity for Ferroglobe to increase its size in the manganese alloys industry, becoming one of the world’s largest producers with over half a million tons of sales of ferromanganese and silicomanganese. In 2016, the combined sales of these plants were approximately 160,000 tons of ferromanganese and 110,000 of silicomanganese. During the same year, Ferroglobe sold approximately 135,000 tons of ferromanganese and 132,000 tons of silicomanganese.

The integration of the acquired assets will allow Ferroglobe to consolidate a network of manganese alloy plants in Europe, to diversify its manganese alloy production base and to capture cost improvements through the sharing of best practices and the optimization of logistics flows. It will also provide significant advantages to our customers as Ferroglobe will be better positioned to serve multiple locations in a more agile and responsive manner.

Commercial Terms

The acquisition price for the two facilities includes an up-front payment at closing as well as an earn-out payment, payable over eight and a half years, based on the annual performance of each of the acquired plants.

Simultaneously with the acquisition, Glencore and Ferroglobe will enter into an exclusive agency arrangement for the marketing of Ferroglobe’s manganese alloys products worldwide, and for the procurement of manganese ores to supply Ferroglobe’s plants, in both cases for a period of ten years. For Ferroglobe, the partnership facilitates access to Glencore’s global clients in the steel industry, and provides a broader sales and procurement network that will enhance our own capabilities. For our customers and suppliers, it provides access to an extended volume and range of products that will add value to our commercial relationships.

Ferroglobe Executive Chairman, Javier López Madrid, commented, “The acquisition of Glencore´s manganese-based alloys plants in Europe represents a first step in the execution of the strategy that we outlined at our Inaugural Investors Day last month.  It delivers significant growth opportunities and strengthens Ferroglobe’s existing platforms.”  Mr. López Madrid added, “We continue to deliver on our stated commitment to developing our leadership in core products, through a value enhancing and immediately accretive acquisition. We are also excited about the opportunities this transaction brings to improve the service we provide to our customers, capture efficiencies and foster our growth.”

Source: Global News Wire