American Zinc Recycling LLC, a leading provider of environmental services to the US steel industry, announced that Luxembourg based Befesa SA will acquire 100% of its recycling assets for USD 450 million. Additionally, Befesa will invest USD 10 million for a minority stake in AZR’s downstream refining operation in Rutherford County in North Carolina American Zinc Products, forming a joint venture with the current ownership.
The transaction will create a global leader in hazardous waste recycling services, enabling the circular economy within the steel and aluminum industries. The combined company will include all employees in AZR’s recycling business, and will operate under the Befesa name.
The transaction increases Befesa’s total steel dust recycling capacity by 40% to 1.7 million tons across 12 facilities evenly spread through Europe, Asia and the United States. Combining with AZR will provide Befesa with its first North America operation and a significant and well developed presence in the growing EAF steelmaking markets in United States.
AZP’s zinc refining operation will be a joint venture between Befesa and the existing AZR shareholders, whereby Befesa may eventually acquire 100% of AZP pursuant to call and put options tied to certain operational and financial milestones through December 31, 2023. AZP employees will remain with the joint venture.
The vertical integration strategy of AZR and AZP will remain in place through a series of 3-year commercial contracts or until Befesa achieves 100% ownership of AZP. The Rutherford County facility produces Special High Grade and Continuous Galvanizing Grade high purity zinc metal using recycled steel mill dust. This EAF dust is processed at the AZR recycling facilities, and then further treated through the combined modern solvent extraction and electrowinning technologies of AZP, enabling the circular economy.
BMO Capital Markets acted as financial advisor to AZR in connection with the transaction and Akin Gump Strauss Hauer & Feld LLP acted as legal advisor to AZR in connection with the transaction. The transaction is expected to close in Q3 2021, subject to regulatory approvals and other customary closing conditions.