The shareholders of Meridian Technologies, Inc. (MTI), Teksid S.p.A. and Norsk Hydro ASA, have announced that they have reached a tentative agreement to sell their shares in MTI to a consortium of investors led by the Norwegian entrepreneur Jostein Eikeland through his Swiss holding company Estatia AG.

"The total value of the transaction, subject to usual price adjustment conditions, is worth approximately 200 million Canadian dollars equivalent to 132 million euros," said the Fiat Group in a statement last week. "The transaction is part of Teksid’s strategy to focus on its core business and is subject to the closing of the financing to the purchaser by financial institutions and approval by competent authorities. For the Fiat Group this disposal will entail a loss at the consolidated level of approximately 20 million euros and a lower net debt for over 80 million euros," the statement concluded.

Teksid and Norsk Hydro became sole shareholders of Meridian in 1998. Their purchase brought extensive experience in the production of mass volumes of metallurgical components, knowledge of the international automotive market and know-how in the magnesium industry to Meridian. Their shared objectives have allowed the company to develop into the largest supplier of magnesium castings in the world, serving most of the global OEMs and Tier One Manufacturers, with 6 plants and multiple offices in three Continents, over 1300 dedicated employees, components in over 10 pct of the vehicles produced worldwide, and the capacity of financing future growth. Recent strategic changes both at NH, who announced its exit from both the magnesium and the automotive market, and at Teksid, which has decided to concentrate its activities in the cast iron business, influenced both shareholders to consider the diverstiture of their holdings.

Mr. Jostein Eikeland, Executive Chairman and Controlling Shareholder of Estatia AG, becomes the majority shareholder of Meridian Technologies. The acquisition substantially increases the interests of Mr. Eikeland in magnesium die casting operations. Mr. Eikeland already has a 28 pct equity holding in Tonsberg Magnesium Group International (TMGI, a Scandinavian Magnesium die casting company that is quoted on the Stockholm Nordic Growth Market (NGM) with facilities in Mexico, Poland and Germany).
 

“Both Mr. Eikeland and I envision an automotive world more committed to the sustainable development and usage of magnesium applications,” says Mr. Paolo Maccario, President and CEO of MTI, “and our target is to have every automotive OEM identify the Meridian Technologies name and use our lightweight components and assemblies in their vehicles. The same vision that has been utilized to implement and engineer our components continues to allow energy savings and emission reductions around the globe. Magnesium continues to be the automotive industry’s structural material that provides the greatest weight savings, and offers the best value and strength-to-weight ratio of any competitive material, including aluminium. In 2005 alone, Meridian applications have allowed vehicle buyers to save an estimated 17 million litres of fuel and reduce tailpipe emissions by 55,000 Metric Tons of CO2."

Adds Mr. Maccario, “After the acquisition is finalized in January or February 2007 (based on governmental approvals) it is expected that an additional boost will be given to our business development with new opportunities in term of products and customers for all of the existing facilities.” Neither locations of plants or equipment, levels of staffing, nor management are expected to change as a result of the change in ownership.

Meridian Technologies is the global automotive industry’s largest manufacturer of magnesium die-castings, and is the global market leader in magnesium instrument panel reinforcements (or cross car beams), front end structures, steering column housings, 4WD transfer cases, and seat frames. It’s global reach includes manufacturing facilities in Lansing (Michigan), Strathroy (Ontario), Nottingham (United Kingdom), Verres (Italy), Anting and Chongqing (China). Business development and engineering offices are located in the USA, Canada, United Kingdom, Germany, Italy, France, China, and Japan.