Reuters reported that Salzgitter is on the prowl for small acquisitions, possibly to expand its trading and steel pipelines businesses, as investors prod Germany's second biggest steelmaker to invest some of its cash pile.
An analyst said that investors have been on their backs for two years and telling them, Look, you can't sit on a cash pile like that and never ever spend. Salzgitter has net cash of EUR 1.1 billion.
Mr Heinz Joerg Fuhrmann CEO of Salzgitter said that last month it has around 500 million euros for acquisitions. Salzgitter was in concrete talks with one company.
Mr Rohus Brauneiser analyst of Kepler Capital said that what is clear is that Salzgitter has been inactive recently. We do not expect Salzgitter to jump into overly expensive deals.
Mr Brauneiser believed that the main acquisition focus is on the trading distribution business.
He said that “The steel pipelines unit which makes wide-diameter gas pipelines and the technology arm, a producer of packaging systems, are second and third priorities respectively. It's more likely they will buy a few smaller ones rather than a big one.”
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