Ironically, on July 4th, Independence Day, the mineral processing industry saw one of it's biggest ever mergers announced between Metso Minerals and Outotec.
Should this merger go through, the companies will combine to become ‘Metso Outotec.’
This move adds to an already exciting 2019 for Metso, after recently announcing the purchase of McCloskey for €315m to solidify its position in the aggregates industry. It will give Metso Outotec a combined revenue of €4.2bn and a headcount of 15,600.
There’s no doubt in my mind that – if this move goes through - it will solidify Metso Outotec as the absolute market leader in the mineral processing industry. It will also bring it close to becoming the largest mining, aggregates and minerals equipment company in the world.
Metso is a recognised brand leader in the front-end mineral processing space, as are Outotec in the back-end. With Metso and Outotec’s products complimenting each other, Metso Outotec will be able to offer end-to-end mineral processing products and plants for their global customer base. These solutions will be extremely attractive in a commodity sensitive market like mining, where customers are always cost conscious and turning towards turnkey solutions.
There are further areas which will make the move beneficial for the two companies. Metso are the market leader in the aftermarket space, and the addition of the Outotec services team will allow them to provide total cost ownership for the entire process, another increasingly growing and popular trend.
Currently, Metso’s wear and spare parts division are providing a wider range of solutions than Outotec’s, and in the complete optimization division, the situation is vice versa. The merger will allow Metso Outotec to add value to each other in these areas.
Another exciting prospect resulting from the move is that the two companies will now combine €100m in R&D efforts, bringing together processing leaders and knowhow. The combined technology team will focus on resources efficiency, water efficiency, energy and digital to drive productivity, battery raw materials and reduce climate change.
Although there’s not a perfect synergy, with the companies competing across a number of products and service lines, the potential is huge and should bring benefits to employees, shareholders and customers alike.
A possible stumbling block
It’s not all sunshine and roses. The uncertainty that surrounds a merger needs addressing. In an extremely competitive talent market, both companies will need to provide security and stability for their employees to avoid losing them to competitors.
Here are some quick things for you to know about the merger and Metso Autotec:
I’d love to hear your opinions on the merger. Will this create a monopoly? How do you think this will influence the market? Who’s been hurt by the news?
Please share your thoughts here.