FLSmidth acquires thyssenkrupp’s Mining business

Group CEO, Thomas Schulz, together with Mining President, Mikko Keto, and Head of Group HR and HSE, Cori Petersen, discuss the acquisition and what mining customers and other stakeholders can expect.

Customer Q&A

If you are an FLSmidth or thyssenkrupp mining customer, you'll want to know this info.

PRACTICAL


What is the current situation and when will the potential acquisition be approved or rejected?

FLSmidth A/S and thyssenkrupp AG have reached an agreement whereby FLSmidth will acquire thyssenkrupp’s Mining business. The acquisition is subject to merger control and clearance from the relevant authorities in multiple jurisdictions. If approved, completion of the transaction is expected in the second half of 2022.


Until then, FLSmidth and thyssenkrupp’s Mining business will continue to operate as competitors. However, during the period of regulatory and antitrust approvals, the planning phase for the integration of thyssenkrupp’s Mining business into FLSmidth will take place.

Why has FLSmidth entered into an agreement to acquire thyssenkrupp’s Mining business?

With the acquisition, FLSmidth would strengthen its position as a leading supplier for our customers in the global mining industry. The combined full-line coverage of FLSmidth and thyssenkrupp’s Mining business includes a a strengthening of our pit-to-plant range of technology, equipment and service expertise, as well as best-in-class digital solutions, covering continuous mining, mineral processing, mining systems and material handling. 

 

The acquisition will also increase the installed base and customer base, increasing our competencies to serve our customers across multiple technologies. This will allow for more robust customer approach in service and aftermarket, as well as for the creation of strong strategic opportunities and boosting resource and investment in R&D, digital and innovation. This will result in a shorter time to market for new innovations and technologies. 

 

We also both share a common belief in bringing sustainable technology to the market in order to increase customer productivity and profitability. We see the thyssenkrupp Mining offering as an ideal fit with FLSmidth’s MissionZero sustainability ambition and with our digitalisation agenda.

 

Overall, we see the mining industry as heading into a growth phase, and this acquisition will place FLSmidth in an even better position to meet customer needs.

What will the combined business be called?
As this is an acquisition by FLSmidth, the company will continue to operate under the FLSmidth brand.
If thyssenkrupp’s Mining business becomes part of FLSmidth, when will the integration begin and how soon will a combined portfolio of products be available to customers?

Integration planning began upon the signing of the agreement and is being built upon the customer-focused opportunities and value-led synergies already identified by FLSmidth during the negotiation process. However, as mentioned above, during this current period of regulatory approvals, FLSmidth and thyssenkrupp’s Mining business will continue to operate as competitors. 

 

Once all approvals have been received, which we expect in the second half of 2022, integration will begin immediately. From the customer perspective, it will very much be “business as usual” during the integration period. Customers, however, will quickly begin to notice a stronger combined customer approach and service setup, as well as the benefits of extended mining flowsheet coverage and a more localised approach due to a larger geographical footprint.

 
Is the potential acquisition of thyssenkrupp’s Mining business part of a larger FLSmidth strategy, and can we expect further strengthening through acquisition?
As a business we are always seeking new ways to supporting our customers with increased productivity and more sustainable solutions. The potential acquisition of thyssenkrupp’s Mining business is obviously large in scale and will be significant in impact. As a result, it will be the key focus of the business for the coming period. We will, however, continue to seek opportunities in the market that allow us to advance our digital, sustainability and service offering to our customers globally. 
What are the assets in question? Is there an overlap?

thyssenkrupp’s Mining equipment offering consists of open-pit mining equipment and systems, mineral processing solutions and material handling solutions. They are primarily involved in crushing, conveying, grinding and processing, which we see as broadly complementary to our offering.

 

We do have some overlap of technologies, but we see a clear complementary offering – especially in the areas of sustainability and digitalisation. For example, thyssenkrupp has a strong in-pit crushing set up which is complementary to our existing offering, and in grinding, they have a strong position with HPGRs, whereas we are a leading provider in other grinding solutions, such as SAG mills.

CUSTOMER EXPERIENCE


How will this potential change impact my business? What immediate differences will I see?

In the short term, while regulatory approvals are being sought, customers will experience no changes. It will very much be business as usual.

Following the expected regulatory approvals, thyssenkrupp’s Mining equipment, solutions, digital solutions and service business will be integrated into FLSmidth. During this time, there will be as few alterations as possible for customers when it comes to as supply chain reliability, service and maintenance, digital support and other areas. We will remain easy to do business with.

What benefits will customers see?

This acquisition will create one of the world’s largest and strongest suppliers to the mining industry and a global, leading technology provider. Our complementary customer base and improved geographical coverage will offer a strong value proposition to all our customers, and there is a significant aftermarket opportunity in growing and strengthening the services business to better serve you as a customer.

 

You will benefit from a global leading technology provider from pit to plant with a full-line supply of solutions for continuous mining, mineral processing, equipment, and systems. The combined new entity will be able to drive innovation and digitalisation even faster, and deliver solutions that enable the mining industry to increase productivity, while minimising its environmental footprint and securing license to operate. It will support our MissionZero ambition to enable miners to move towards zero water waste, zero emissions and zero energy waste by 2030.

What new areas of the mining flowsheet will be covered by FLSmidth if the acquisition goes ahead?
The thyssenkrupp Mining offering is an ideal fit with FLSmidth’s sustainability and digitalisation agenda. The business consists of open-pit mining equipment and systems, mineral processing and material handling solutions, parts and services. The business is primarily involved in crushing, conveying, grinding and processing, which is highly complementary to FLSmidth’s offering. Key technology to reduce the environmental footprint and digitalise mines from pit to plant include in-pit-crushing-and-conveying solutions, high-pressure grinding rolls (HPGR), large mine conveyors and OLCs, to name just a few examples from many. 
A strong relationship with my account manager is important for me. Will my point of contact change?
Both FLSmidth and thyssenkrupp value and prioritise close, local and knowledge-driven customer relationships. We understand the importance of maintain your point of contact. And while, inevitably, there will be some changes, we will work to ensure minimal disruption to your daily interactions, with a strong business as usual approach.
Will service, service policies or aftermarket change? Will any service centres be closing down?
At this point in time, we do not foresee any significant changes in this area. One of the main benefits we see from the acquisition of thyssenkrupp’s Mining business is an improved and more robust customer service and aftermarket offering. The combined FLSmidth and thyssenkrupp installed base will provide a strong growth area for maintenance and optimisation, wear and spare parts and integrated digital and automation solutions.
Will I be left with legacy equipment or solutions that I will not be able to get serviced?

No. The full range of FLSmidth and thyssenkrupp Mining equipment and solutions will be fully supported by an even larger team of experts. No one understands the equipment across the lifecycle like the OEM. We will fully leverage the knowhow of our new thyssenkrupp colleagues and integrate them into our local, 24/7 customer service across all regions. 

 

We have positioned ourselves close to the customer with a focus on strong relationships, from initial equipment purchase through the ultimate decommissioning or replacement. Now with an expanded service team and larger global footprint, customers can expect even faster and better service.

Should I expect any interruption to the FLSmidth/thyssenkrupp Mining supply chains?
FLSmidth is proud of its robust, agile and resilient supply chain, which is run on a decentralised framework. This allows us to support customers on a local level through strong relationships and advanced preparation. As a relationship-focused company, we are able to work closely with suppliers, ensuring our products are prioritised, so they get to the customer as quickly, safely and efficiently as possible. This is the reason why we do not expect any interruptions during the integration period.
Will my digital solutions be compatible going forward?

Integration planning of digital solutions will begin immediately and there will be minimised interruption for customers. The addition of thyssenkrupp’s digital solutions in areas such as service, control systems and in the digitalisation of products to FLSmidth’s already robust digital ENABLR portfolio will deliver an expanded and exciting range of benefits to customers. Improved capabilities will be seen across automation, productivity optimisation, remote operations and predictive maintenance.

 

Furthermore, with a wide range of flowsheet coverage, customers will be able to benefit from integrated optimisation from pit-to-plant. Our vision and our mission to become the number one sustainable productivity provider in the mining industry and this will strengthen our ability to meet this goal. Optimisation, and related productivity increases, are the biggest opportunities that we see for our customers – utilising the right data and combining it with the human experts can lead to significant gains on reliability, productivity and sustainability.

 

There will be benefits for customers in the combination of data from the entire mining flowsheet – this will unlock massive potential in optimisation, process efficiency and resource use (such as water and energy), which will help cut costs and reduce the environmental footprint of operations.

AGREEMENTS


Will any warranties and agreements still be in effect?
Yes, the transaction will not affect any warranties or agreements currently in place. All warranties and agreements with thyssenkrupp’s Mining business which are valid at closing of the transaction will be fully honoured by FLSmidth. 
Will the quote I received from FLSmidth/thyssenkrupp still be honoured?

All currently tendered quotes from FLSmidth will be fully honoured by FLSmidth.

 

Until closing of the transaction thyssenkrupp will continue to operate the mining business in the ordinary course and you should expect any quote to be honoured by thyssenkrupp in accordance with past practices.

I currently have competing quotes from FLSmidth and thyssenkrupp. How will this be handled?

Until closing of the transaction FLSmidth and the thyssenkrupp’s Mining business will continue to be operated as separate businesses and FLSmidth and thyssenkrupp will continue to bid for projects as competitors and no competitively sensitive information with respect to competing quotes will be shared between FLSmidth and the thyssenkrupp.

Are the contracts/purchase orders we have in place still valid? If so, for how long?

Yes, the transaction will not affect any contracts/purchase orders currently in place. All contracts/purchase orders with thyssenkrupp’s Mining business which are valid at closing of the transaction will be fully honoured by FLSmidth.

CONTACT


Who do I contact if I have a problem or concern?

Your business point of contact will remain unchanged. For specific questions related to this potential acquisition, please contact your local FLSmidth representative. 

 

Investor relations questions should be addressed to Head of Investor Relations:

Nicolai Mauritzen
+45 30 93 18 51
nicm@flsmidth.com

Investor presentation

Thomas Schulz, Group CEO, and Roland M. Andersen, Group CFO, have presented the transaction in a conference call with FLSmidth investors.

Presentation for investors DOWNLOAD PDF

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