Bekaert Exits Steel Wire Solutions Businesses in Chile and Peru

Bekaert, a global leader in steel wire solutions, has announced its decision to sell its Steel Wire Solutions businesses in Chile and Peru. The transaction, valued at approximately US$ 350 million, is expected to close in 2023, subject to regulatory approvals and customary closing conditions. Bekaert's stake in the transaction is expected to result in net proceeds of US$ 136 million.

The sale covers the production and distribution facilities of the Steel Wire Solutions activities in Chile and Peru. These facilities manufacture, sell, and distribute steel wire products primarily for construction, agricultural fencing, mining, and industrial applications. The intended transaction regards the sale of the 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.

Rationale Behind the Sale
Bekaert's strategy in recent years has been to improve its business portfolio by reducing the Group’s exposure to more commoditized and volatile markets, while increasing its presence in faster growing markets particularly in new mobility, green energy, and low-carbon concrete solutions, which 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 its target segments, while securing a long-term future for the customers and employees of the divested entities.

Financial Impact
The activities subject to the transaction 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 Bekaert’s balance sheet and support its commitment to shareholder returns and investment plans for growth.

Oswald Schmid, CEO of Bekaert, commented: ‘Bekaert was an early entrant into the Latin American market. Our partnership with the current shareholders in Chile dates back to 1948 and was extended with the establishment of our partnership in Peru in 1994. We are thankful to the partners, employees, and customers for the successes we have achieved together, and we wish them a bright future under the new ownership. At the same time, it is another important strategic step in the ongoing transformation of Bekaert and its further positioning it in new, fast-growing markets.’

Bekaert's strategic move to exit the Steel Wire Solutions businesses in Chile and Peru aligns with its overall strategic objectives and investment philosophy. By focusing on faster-growing markets and reducing exposure to commoditized and volatile markets, Bekaert aims to strengthen its balance sheet, secure a long-term future for its customers and employees, and continue its transformation. The sale is expected to have a positive financial impact on Bekaert's balance sheet and future growth prospects.