Metals and mining giants announce $3.1bn merger

Shares of Globe Specialty, with a market value of $1.13bn, jumped 12 percent to $17.18 on the Nasdaq following the announcement of a merger between the two metals and mining firms. The combined company, of which 57 percent will be owned by FerroAtlántica with the rest owned by Globe shareholders, will capitalise on a diversified production base and a greater international reach gained from Grupo FerroAtlántica’s footprint in Europe and Globe Specialty’s presence in the North American market.

Grupo FerroAtlántica produces silicon metal, silicon alloys and ferroalloys with Globe Specialty producing silicon metal and silicon-based alloys. While solar panel fabrication used to account for one percent of global silicon, this figure is now estimated to be between 10 percent and 15 percent. According to a joint statement, the company will focus on becoming a “premier global player” in the growing silicon metal industry and will be “strategically positioned to benefit from fast-growing demand for solar, automotive, consumer products (silicones), construction and energy”.

The combined company will employ 4,700 people globally and will operate 26 production facilities and five mining sites. The deal is expected to close in the fourth quarter and will add earnings on a per share basis in the first year after closing. Speaking of the merger in a statement, Alan Kestenbaum, Globe’s Executive Chairman, said: “It will also provide exposure to new markets, positioning the new company to take advantage of both accelerated organic growth and growth through acquisition.”