Brookfield Affiliate Plans to Acquire GrafTech

By Tess Stynes 

A Brookfield Asset Management Inc. affiliate agreed to acquire GrafTech International Ltd. in a deal that values the maker of carbon and graphite products at an estimated $692.8 million.

The asset manager is planning to acquire GrafTech's stock in a tender offer of $5.05 a share, a 2% premium over Friday's closing price.

GrafTech shares rose 3% to $5.10 in recent premarket trading.

The planned deal was unanimously approved by GrafTech's board and follows a preliminary accord unveiled late last month. During April, GrafTech said it had reached a preliminary pact with Brookfield under which Brookfield would make a $150 million preferred equity investment in GrafTech, along with a preliminary deal to acquire the company.

Holders of roughly 11% of GrafTech shares, including director Nathan Milikowsky have agreed to tender their shares to the offer.

GrafTech has faced challenging global markets in both its industrial materials and engineered solutions segments.

During the first quarter "graphite electrode demand continued to soften as global electric arc furnace steel production weakened," GrafTech Chief Executive Joel Hawthorne had stated in a news release last month. "Lower end-market demand in certain steel consuming sectors, continued high Chinese steel exports and other market dynamics led to lower [electric arc furnace] customer utilization rates, particularly in North America."

Such factors were expected to pose challenges for GrafTech and the broader industry for the rest of this year, he added at the time.

Write to Tess Stynes at [e-mail]

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