Ceramic Industry News

Magnesita to Acquire LWB Refractories (posted 9/10/08)

Magnesita Refratários S.A., a Brazilian manufacturer and service provider in the refractory industry with a leading position in the Latin American market, has signed an agreement to acquire Germany’s LWB Refractories from Rhône Capital for €657 million (about $938 million) in enterprise value. Closing of the transaction is subject to regulatory approval.

Both Magnesita and LWB manufacture refractory products for industrial applications, mainly in the steel and cement industries. According to Magnesita, this acquisition brings together the leading position of Magnesita in the magnesite market with LWB’s expertise as the world’s leading dolomite refractory supplier. “The combination of Magnesita and LWB will create the third largest refractory company in the world in terms of revenue,” said Ronaldo Iabrudi, Magnesita’s chief executive officer (CEO). “This is a milestone in Magnesita’s strategy to accelerate its international growth. It will strengthen both our market positions worldwide and our capacity to create value for our shareholders. It is an attractive proposition to our shareholders because of the complementarity of the two businesses in terms of geography and products and the high level of cross-selling opportunities. We are offering a fair price which is enhanced by synergies and supported by the commitment of Rhône Capital as a new shareholder in Magnesita.”

LWB Refractories, based in Hilden, Germany, was established in 2001 through the combination of the experience and expertise of three century-old companies. Today, LWB is a global refractory manufacturer and a leading dolomite refractory supplier for stainless and carbon steel applications, as well as the cement market. The company employs approximately 2000 people at production sites in Europe, the U.S. and Asia, and it has sales offices worldwide.

Over the years, Magnesita has developed a strong market position in magnesite refractory products, backed by significant magnesite resources under its control and the combination of state-of-the-art production technology in refractory products, strong research and development, and a service-oriented business model. Through this acquisition, Magnesita will provide clients with a broader product and service portfolio and a significant presence in all refractory markets.

“The combined high-quality product portfolio and global presence in all important refractory markets will deliver major benefits to our customers across the world and further strengthen the existing customer relationships of both companies,” said Iabrudi. “The expertise of LWB’s management and highly skilled employees worldwide will be strategic to secure the leading market position and sustainable growth of Magnesita in future. We are confident a combined organization, with its global presence and growth dynamics, will continue to be an attractive employer for existing employees and new talents.” Magnesita expects to maintain all existing LWB sites and does not foresee the need for any restructuring measures of significance.

“We welcome this exciting opportunity to join Magnesita and are looking forward to working jointly with the Magnesita management and employees to create one of the leading refractory companies worldwide together,” said Alexander Röntgen, CEO of LWB. “The combined group will offer a unique product portfolio and outstanding technology for supplying refractories to our clients and considerable opportunities for our employees.”

For additional information, visit www.magnesita.com.br. LWB’s website is located at www.lwbref.com.


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