- Offer price of C$61.50 per common share - total value of approximately
C$4.8 billion ((euro) 3.5 billion)(x)
- Dofasco's Board of Directors unanimously recommends acceptance of the
offer
- The acquisition is a major element of ThyssenKrupp's international
growth strategy
- Dofasco and Hamilton, Ontario to become ThyssenKrupp's new North
American steel headquarters
HAMILTON, ON/DUSSELDORF, Germany, Nov. 28 /CNW/ - Dofasco and
ThyssenKrupp today announced they have reached an agreement for ThyssenKrupp
to make an offer to acquire all of Dofasco's outstanding common shares in a
friendly, all-cash transaction for total consideration of approximately
C$4.8 billion ((euro) 3.5 billion), or C$61.50 per common share. Dofasco's
Board of Directors has resolved to unanimously recommend to Dofasco
shareholders that they accept the offer. ThyssenKrupp currently owns no shares
in Dofasco.
The offer price represents a 40% premium over Dofasco's closing share
price on November 22, 2005, the day prior to the announcement by Arcelor of
its intention to make an unsolicited offer for Dofasco at C$56.00 per share.
It also represents a 9.8% premium over the Arcelor bid. ThyssenKrupp expects
the acquisition to be accretive to earnings in the first full year of the
combination.
Brian MacNeill, Chair of Dofasco's Board of Directors, said, "The
ThyssenKrupp offer recognizes the value of one of the world's most
consistently profitable steel producers. The significant premium being offered
reflects the strategic value of Dofasco to ThyssenKrupp in accelerating the
growth of the combined companies in North America."
Dr. Ekkehard D. Schulz, Chairman of the Executive Board of ThyssenKrupp
AG, said: "This premium offer for Dofasco reflects our belief that we will be
ideal partners and will unlock significant growth potential for both
companies. ThyssenKrupp is very selective about its acquisitions. Strategic
fit and the quality of the local employees are our priorities when considering
an acquisition. In the case of Dofasco, we win on both counts by advancing our
North American strategy and adding the exceptional management team and highly
regarded workforce."
Excellent strategic fit
-----------------------
Dofasco and ThyssenKrupp both have a successful history of producing
value-added flat steel products and are known for world class customer
service. Both companies have pursued a differentiation strategy in the high
quality automotive and industrial segments. Each has an excellent performance
record and a strong brand.
Hamilton, Ontario will become ThyssenKrupp's new North American
headquarters for carbon steel.
Dofasco's outstanding North American footprint provides a complementary
fit with ThyssenKrupp's existing steel operations and its growth strategy in
North America.
Dofasco President and Chief Executive Officer, Don Pether, commented: "We
believe this is an exciting opportunity to unlock value for both companies and
for our employees. Combining Dofasco with ThyssenKrupp's North American steel
business will enhance the competitive position of the combined companies in
NAFTA markets, as well as our presence in key global market segments. It will
broaden our product offering, and provide Dofasco and our customers with
access to technology and expertise from the global leader in steel
innovation."
ThyssenKrupp will provide Dofasco with a strategic partner with a global
presence. Within the ThyssenKrupp Group, Dofasco will be given responsibility
for the successful positioning and strategic development of ThyssenKrupp Steel
in North America. To this end, ThyssenKrupp Steel's existing processing
activities in the NAFTA region will also be assigned to Dofasco.
There is very little overlap between the two companies, therefore, the
managements of Dofasco and ThyssenKrupp do not anticipate restructuring
involving employees or operations, as a result of this transaction.
The acquisition of Dofasco will strengthen ThyssenKrupp's presence in the
NAFTA steel market. This acquisition represents a continuation of
ThyssenKrupp's internationalization strategy in high-quality flat steel,
providing direct access to attractive customer groups such as the automobile
and packaging industries. Together the two companies will have the strength of
increased size, scale and geographic reach.
Leadership principles
---------------------
ThyssenKrupp has the highest respect for Dofasco's management team and
employees, who together have driven the company's impressive performance.
ThyssenKrupp regards the continuity of management as key to integrating
Dofasco and realizing its full value within the ThyssenKrupp Group. That is
why the Dofasco management team will lead the combined North American carbon
steel operations of ThyssenKrupp.
ThyssenKrupp specifically recognizes and supports Dofasco's culture of
success which is built on respecting employees, their families and involvement
in local communities. This also fits in with longstanding tradition at
ThyssenKrupp.
About the Transaction
---------------------
ThyssenKrupp and Dofasco have entered into a support agreement pursuant
to which ThyssenKrupp has agreed to make this premium offer. The two companies
anticipate that the offering circular and directors' circular recommending the
offer will be mailed to Dofasco shareholders early in December with the offer
being open for a period of 35 days following the date of mailing or receipt of
applicable regulatory approvals whichever is longer. The offer will be subject
to customary closing conditions including the acceptance by shareholders
representing a minimum of two-thirds of the outstanding Dofasco shares on a
fully diluted basis and the receipt of necessary regulatory approvals
including Investment Canada and Competition Act. The support agreement also
provides for payments to ThyssenKrupp by Dofasco in the event the acquisition
is not completed under certain circumstances. ThyssenKrupp has the necessary
funds to complete the transaction from available cash.
Citigroup is acting as financial advisor to ThyssenKrupp and RBC Capital
Markets is acting as financial advisor to Dofasco.
About Dofasco
-------------
Established in 1912, Dofasco employs approximately 11,000 people and is
Canada's largest steel producer. Sales in 2004 amounted to C$4.2 billion.
Dofasco is a leading North American steel solutions provider. Product lines
include hot rolled, cold rolled, galvanized, Extragal(TM), Galvalume(TM), and
tinplate flat rolled steels, as well as tubular products, laser-welded blanks
and Zyplex(TM), a proprietary laminate. Dofasco's wide range of steel products
is sold to customers in the automotive, construction, energy, manufacturing,
pipe and tube, appliance, packaging and steel distribution industries. The
company has additional operations in Canada, the United States and Mexico.
Dofasco also owns 98.7% of QuDebec Cartier Mining (QCM). QCM owns and operates
the Mont-Wright open mine pit and a pellet plant at Port-Cartier.
About ThyssenKrupp
------------------
Focusing on the key areas of Steel, Capital Goods and Services, the
capabilities of ThyssenKrupp are organized in six segments - Steel, Stainless,
Automotive, Technologies, Elevator and Services. With sales of 39.3 billion
euros in 2003/2004 and 184,000 employees, the Group occupies mainly top-three
positions with its activities worldwide.
ThyssenKrupp Steel concentrates on flat-rolled steel with high value
added, tailored to customers' requirements. With sales of around 8.3 billion
euros in fiscal year 2003/2004, almost 31,000 employees and customers in more
than 80 countries, the segment is one of the world's foremost steel producers.
In carbon steel flat products it is number 2 in Europe. Products from
ThyssenKrupp Steel are used in a wide range of everyday applications, such as
car bodies, facades and domestic appliances.
About ThyssenKrupp in Canada
----------------------------
ThyssenKrupp has a track record of successful operations in Canada. The
Group has been operating in the country since 1914. Today ThyssenKrupp has a
total of 25 companies with 4,270 employees in Alberta, British Columbia, New
Brunswick, Newfoundland, Ontario and Quebec. Sales amounted to 1 billion euros
in fiscal 2003/2004. The activities in Canada focus on the supply of body and
chassis components to the North American auto industry, the production and
service of elevators and escalators as well as the sale of stainless steel,
rolled steel, nickel, tubular products and machine tools.
Forward Looking Statements
This press release contains "forward-looking statements" that are subject
to a number of risks and uncertainties, many of which are beyond ThyssenKrupp
and Dofasco's control, that could cause actual results to differ materially
from those set forth in, or implied by, such forward-looking statements. All
statements other than statements of historical facts included in this press
release are forward-looking statements. All forward-looking statements speak
only as of the date of this press release. Neither ThyssenKrupp nor Dofasco
undertake any obligation to update or revise any forward-looking statements,
whether as a result of new information, future events or otherwise. There can
be no assurance that any transaction between ThyssenKrupp and Dofasco will
occur, or will occur on the timetable contemplated hereby.
A media conference will be held at the Queen's Park South Room, Park
Hyatt Hotel, Toronto on November 28, 2005, at 16:00 CET/ 10:00 EST.
English call-in number for listen-only mode: +1-416-641-6655.
An archive of the audio portion of the media conference will be available
from 12:00 p.m., November 28, 2005 until 11:59 p.m., November 30, 2005. The
archive can be accessed by dialing +1-416-626-4100 and entering the
participant code 21271669.
An audio webcast will be available at www.dofasco.com.
ThyssenKrupp will be hosting a media conference at 15:00 CET (09:00 EST)
in the Dreischeibenhaus, August-Thyssen-Strasse 1, D-40211 Dusseldorf. A video
streaming is available in the press section at www.thyssenkrupp.com. For
listen only please dial +49 (0) 695 8999 0509.
A conference call for financial analysts and investors will be held today
at 17:00 CET (11:00 EST).
(x) related to the rounded average exchange rate of last ten trading
days 11/14 -25: 1C$ (equal sign) 0,72 (euro)
