Sandvik AB seeks to acquire remainder of Seco Tools as part of new tooling strategy

Currently, Sandvik AB owns, through subsidiaries, all 43,500,000 class A shares and 44,304,450 class B shares in Seco Tools, corresponding to 60.4% of the shares and 89.3% of the votes in Seco. For each class B share in Seco Tools, Sandvik is offering 1.2 shares in Sandvik. The offer acceptance period will run from 1 December 2011 up to and including 10 January 2012. The offer is part of Sandvik's strategy to continue to strengthen its "world-leading position" within new business area Sandvik Machining Solutions, which currently includes Sandvik Coromant, Walter and Safety. (Dormer is included within a separate new group, Sandvik Venture). Sandvik's group strategy sees cutting tools as a core area, with significant growth and profitability potential. The Sandvik AB release says that Seco Tools' strong brand and customer offering within cutting tools complements Sandvik's multi-brand portfolio, and bringing Seco Tools closer would enable Seco Tools to get full access to Sandvik's resources and competence, mainly within product development, production technology and supply chain capabilities. The management team of Seco Tools will remain as now, with the company an independently managed product area under the umbrella of Sandvik Machining Solutions, just as are Walter and Sandvik Coromant. There is currently no intention to carry out any material changes regarding Seco Tool's employees, terms of employment or the places of business. According to Olof Faxander, Sandvik AB's president and CEO: "This is a natural step, with a clear industrial rationale, in line with our strategy to continue to strengthen our leading position in the global market for cutting tools. Our subsidiary Seco Tools has a strong brand that complements our total customer offering very well, and Seco Tools will remain independent as a separate brand within our new business area of Sandvik Machining Solutions. "Bringing Walter from being a separately listed company into the Sandvik's multi-brand model was a success and generated higher growth and profitability. Treating Seco Tools in a similar way will enable us to leverage on the total resources and investments in, for example, research and development, which will further strengthen our position in the increasing global competition."