L-R: Franz Fayot, Luxembourg's Minister of the Economy; Georges Rassel, Managing Director of Paul Wurth; Michel Wurth, Chairman of the Board of Directors of Paul Wurth; Edwin Eichler, Chairman of the Board of SMS group; Credit: SMS group

SMS group, a Düsseldorf-based plant engineering company for the metals industry, has announced its acquisition of the remaining 40.8% of Luxembourg-based Paul Wurth S.A.; these shares were previously held by the Luxembourg state and state-owned banking organisations.

With this acquisition, the German group has become the sole owner of Paul Wurth's plant engineering business.

Following a press conference on Wednesday on the restructuring of the shareholder structure of Paul Wurth, the SMS group released a press release in which it announced plans to expand the Luxembourg site to become the group's research and development (R&D) centre for decarbonisation and recycling. To this end, SMS and Paul Wurth are pooling their research and development activities with the common aim of continuing to set technological standards in these forward-looking fields. The future range of services includes all technologies for reducing CO2-emissions in existing steel mills, hydrogen-based, CO2-free direct reduction of iron ore and Power-To-X technologies for producing synthetic fuels and downstream products. In addition, the international teams of experts from SMS and Paul Wurth will continue to work on expanding the product and service offering across the entire metals industry process chain.

As part of the transaction, a strategic partnership was also agreed with the University of Luxembourg to strengthen scientific research and development of hydrogen technologies at the Luxembourg site. With financial support from Paul Wurth, the university has already established a chair for energy process technology.

Paul Wurth's real estate activities in Luxembourg will be transferred to a new company in which the Luxembourg public shareholders and SMS will each hold stakes.

Georges Rassel, CEO of Paul Wurth S.A., commented: “Green Steel means an enormous transformation for our customers. SMS and Paul Wurth have been setting technological standards in the steel industry for 150 years and have already worked together very successfully in recent years. By combining our competences, we are ensuring that SMS and Paul Wurth will remain synonymous with innovative and sustainable solutions”.

Edwin Eichler, Chairman of SMS group GmbH, added: “In the coming decades, decarbonising technologies will replace the traditional blast furnaces and coking plants in integrated steel plants. Therefore, the energy balance at the steel plant will have to be reconsidered and reorganised. Our customers will require fully integrated solutions to bring about this change. Alongside the decarbonisation roadmap, efforts will continue in developing digital solutions to establish self-learning processes. This disruption in the global steelmaking market means the time is right for Paul Wurth and SMS Metallurgy to form a single solution provider".

Franz Fayot, Luxembourg's Minister of the Economy, also commented: “The exit of the minority shareholders from Paul Wurth's capital paves the way for a new strategic development of the company within the SMS group, while allowing new opportunities through the pooling of the technological and human resources of both organisations. Based on their leading role in CO2 reducing and hydrogen-based technologies, SMS and Paul Wurth will combine and intensify their efforts in Luxembourg in the field of R&D of new technologies allowing the development of a steel industry oriented towards green metallurgy in Luxembourg”.

Responding to this news, the LCGB trade union, which met, together with the OGBL union, Minister Franz Fayot on 8 April and the management of Paul Wurth on 15 April 2021, said that it had called for an urgent meeting with the management of SMS group to find an agreement between social partners supported by the government in order to "anchor in stone the guarantees on employment and the future of the Luxembourg company".

The LCGB noted that the Luxembourg state would retain its 40% stake in the land, which it will use to create a wealth management company. The trade unions continued to regret the "total disengagement" of the Luxembourg state and the LCGB demanded guarantees for all employees of the Luxembourg company. The staff delegation together with the LCGB and the OGBL have committed themselves to closely following the daily development of the company and watching out for any possible deviation to the detriment of employees, in the interest of jobs and the development of the company.