IPSCO bought for $7.7bn

Canadian steelmaker IPSCO has entered into an agreement to be acquired by SSAB Svenskt Stal for $160 per share in cash, representing a total equity value of $7.7bn.

The transaction has been approved by the boards of directors of both companies and closing of the transaction is not conditional on SSAB obtaining financing.

The transaction will be completed by way of a plan of arrangement under Canadian law. It will require the approval of 66% of the votes cast by shareholders of IPSCO at a special meeting to be called to consider the arrangement, as well as court approval ruling on the fairness of the transaction.

SSAB has received commitments for bank financing of the acquisition and the company intends to pursue a SEK10 billion rights offering during 2007.

The transaction is expected to be accretive for SSAB and to generate annual post tax revenues of SEK600 million, with the major part to be realised in the next two years.