About the Combination

Creation of a leading refractory company

The strategic rationale is to join forces to complement one another’s footprints and become a more competitive, vertically integrated global provider of products, systems and services in the refractory industry. The greater scale, wider global distribution network and resulting cost synergies arising from the acquisition position the Combined Group well to compete and grow further in this consolidating industry. Furthermore, the Combined Group will be geographically better diversified and able to provide a more extensive product portfolio on both a regional and global basis.

Enabling Strategic Growth

As a result of its extended geographical reach and product and services portfolio, the Combined Group will have access to the core markets, customer base and geographical regions of each of RHI and Magnesita, enabling it to better service customers through a significantly expanded network of production and sales locations.

Achieving Synergies

Complementary markets and enhanced customer service: The geographical footprints of RHI and Magnesita are highly complementary. Almost three quarters of RHI’s revenues come from EMEA and Asia. By contrast, Magnesita has a strong presence in its home market of the Americas. The Combined Group will become a leading global refractory supplier by revenue in each of EMEA, Asia and the Americas. It will be in closer proximity to its customers in terms of both production facilities, leading to shorter lead times, faster delivery and shorter transport distances, as well as ready access to on-site functional support.

Complementary product and services portfolios: RHI and Magnesita’s product and service portfolios are also complementary. The Combined Group intends to offer all products of both companies in each of the individual companies’ existing markets, and plans to develop and offer bespoke packages integrating products from both companies to the Combined Group’s expanded customer base.

Balancing of production capacities and results: The Combined Group’s extended geographical footprint will bring about a more diversified composition of revenues across geographies with a balancing effect on the Combined Group’s results and create a natural hedge of foreign exchange rate risks to the extent that the locations of the Combined Group’s production facilities are better aligned with the distribution of the Combined Group’s sales across geographies.

Sharing and Securing Technology and know-how

The Combined Group will be enabled to gain access to technologies and know-how that are currently held either by RHI or by Magnesita. Furthermore, the Combined Group will lead to a combination of the management and R&D teams of the two companies and will also benefit from the market and product specific skills, know-how and experience of both RHI and Magnesita management and employees.

Global Capital Market Presence

The listing of the Issuer in the premium listing segment of the official list of the UK Financial Conduct Authority and admission of RHI Magnesita’s shares to trading on the main market of the London Stock Exchange will not only reflect and underline the international scope of the Combined Group following the Acquisition of Control, but will also increase the visibility of the Combined Group for global investors and improve funding opportunities of the Combined Group through better access to international capital.

Business strategy

The Combined Group intends to pursue a strategy addressing the challenges in the global refractories industry based on increasing its market presence in growth markets, differentiation through technology and innovation. The Group intends to target different customer segments by focusing on technology and strong customer service in certain strategically important segments on the one hand, while also offering a competitively priced product portfolio in the remaining segments, on the other hand. The Combined Group aims to further develop and improve its capabilities as a complete system supplier. A cornerstone of this strategy will be continued investment in R&D and innovation technology.