On December 15, 2016 at 6.00 pm (Central European time) , Saudi Arabian Amiantit Co signed a Memorandum of Understanding (MOU) with the Austrian holding WIG Wietersdorfer Holding GmbH (WIG) regarding a possible merger of its European pipe manufacturing and sales companies and its Flowtite technology with the Hobas AG group of companies.
Both businesses are specialized in the manufacturing and sale of pipe-systems and related accessories. The European Amiantit business includes pipe manufacturing entities in Germany, Poland and Spain as well as sales companies in France and Norway. The deal also includes the Flowtite technology owned by Amiantit and its related research and development facility situated in Norway. The entities included in the Hobas AG at the merger time will encompass manufacturing facilities in Germany, Austria, Poland and Romania and several sales companies in Western and Eastern Europe as well as in the Balkans. It will also include the Hobas technology and R&D center. Both companies are water pipe specialists, but applying different manufacturing processes: While HOBAS is the leader in the centrifugal casting process,Amiantit Europe is the leader in the continuous winding process. Both product ranges complete themselves by covering municipal and industrial applications and will allow to improve the position of the contributed pipe businesses on the European market against other pipe products such as clay pipes, thermoplastic pipes, steel pipes, concrete pipes and ductile iron pipes.
The contributed pipe business by Amiantit represents yearly sales of about EUR 120 million (SAR 470 million) for an expected profit of EUR 600 000 (SAR 2.4 million) in 2016. The Hobas AS figures are of comparable magnitude.
The valuation of both businesses is performed by Price Waterhouse Coopers. Each of the parties will own 50 pc of the merged entity. The control of the merged holding will be shared on an equal basis, through a supervisory board of 4 members, 2 of them appointed by Amiantit and 2 by WIG.
The signature of the joint-venture agreement is forecasted to take place on January 16, 2017th. Its closure will be subject to the approval of the competent merger control authorities in specific jurisdictions, principally of the European Union dedicated Commission, but also by Macedonian and Turkey authorities, which approvals are expected to be released before June 30, 2017. The MOU is valid till July 31, 2017.
Until the closure of the deal, the two groups will continue to function independently.
Amiantit will continue to release information on this deal as future steps are being completed.
