11 February 1999: German utility Viag AG has said its merger with Switzerland“s Algroup is going well and that, ahead of the tie-up, it intends to raise its stakes in its subsidiaries to 100% where p…
11 February 1999: German utility Viag AG has said its merger with Switzerland“s Algroup is going well and that, ahead of the tie-up, it intends to raise its stakes in its subsidiaries to 100% where possible. Viag and Alusuisse Lonza Group (Algroup) held a joint news conference in Duesseldorf recently after earlier denying market speculation that the planned merger was in trouble. The planned merger, which was announced last November, will be pushed through with all force, Viag Chief Executive Wilhelm Simson said, while Algroup Chief Executive Sergio Marchionne emphasised the amalgamation was an “ideal merger”. Viag and Algroup plan to create a diversified power-to-aluminium industrial group with annual sales of about DM 53 billion. Shareholders are scheduled to vote on the deal at separate annual meetings on 20 May. The merger is due to be completed in September. It was decided at a meeting of 150 executives from the two groups in January to form over 50 working groups to coordinate the integration process. Viag“s decision to increase its stakes in its own units alters the group“s previous strategy which was to hold just over 50% in subsidiaries. “If we want to keep our promise to deliver higher earnings each year, then we must have the overall possibility to intervene quickly,” Simson said. Simson also warned that the sale of the group“s steel trading subsidiary Kloeckner & Co would be delayed for one to two years because a good sale price had not been attained. Viag announced last November that it was talking to several potential Kloeckner buyers. It recently said that it had terminated talks with Thyssen on the sale of the unit as the two sides could not agree on sales conditions. Increasing the stake in speciality chemicals firm Th.Goldschmidt AG to 100% would be achieved fastest as Viag already holds over 90% of the company, Simson said. He added that raising its stake in Gerresheimer Glas should not be hard but getting full control of speciality chemicals company SKW Trostberg AG could take longer.