Bekaert announced it has reached an agreement on the sale of its Steel Wire Solutions businesses in Chile and Peru to its current partners.
A press release said that the transaction—which has a total enterprise value of approximately $350 million, and will result in net proceeds for Bekaert’s stake of $136 million—is expected to close in 2023, subject to applicable regulatory approvals and customary closing conditions. The facilities manufacture, sell, and distribute steel wire products primarily for construction, agricultural fencing, mining, and industrial applications.
The agreement includes shares held by Bekaert in the following entities: Industrias Chilenas de Alambre-Inchalam SA in Talcahuano, Chile; and Prodalam SA in Santiago, Chile; along with their subsidiaries in Chile and Peru. Bekaert currently holds 52% of the shares in the Chilean entities and 38% of the shares in the Peruvian entities. The transaction excludes Bekaert’s wholly owned Bridon-Bekaert ropes entities in Chile and Peru.
The release said that the divestment decision relates to Bekaert’s strategy in recent years to improve its business portfolio by reducing exposure to more commoditized and volatile markets while increasing its presence in faster growing markets. Those include new mobility, green energy, and low-carbon concrete solutions that typically offer higher profit margins and higher returns on capital. “While the partnership has been successful for nearly 75 years, Bekaert believes it is now the right time to exit these businesses and focus on our target segments.”
The activities of the companies to be divested generated approximately €650 million in consolidated revenue in 2022, with a profit margin below the Bekaert target range. “The proceeds from the transaction will further strengthen our balance sheet and support our commitment to shareholder returns and investment plans for growth.”
“Bekaert was an early entrant into the Latin American market,” said Kenart CEO Oswald Schmid. “Our partnership ... in Chile dates back to 1948 and was extended with the establishment of our partnership in Peru in 1994. ... At the same time, it is another important strategic step in the ongoing transformation of Bekaert and its further positioning in new, fast-growing markets.”