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14 Dec 2018

MCF advises ELG Haniel in divesture of a strategic stake in ELG Carbon Fibre

ELG Haniel GmbH (“ELG”), a subsidiary of Franz Haniel & Cie. GmbH, the German family-owned group headquartered in Duisburg, Germany, has sold a strategic stake in its UK subsidiary ELG Carbon Fibre Ltd (“ECF”), a market leader in recycled carbon fibre materials for the transportation sector, to Mitsubishi Corporation. The Japanese corporate will provide resources, expertise and access to key markets to support ECF’s global expansion. The investment is subject to competition authority approval and completion is estimated to take place in 2019. MCF acted as adviser to ELG in this transaction and helped secure a successful outcome for its client with an Asian industrial investor.

“Both ELG and Mitsubishi Corporation place the highest value on quality products and service excellence. Together we will continue to meet the expectations of our customers and stakeholders and grow our business to generate economic and environmental value.”

Frazer Barnes

Managing Director of ECF

The Deal

As a strategic shareholder in ECF, Mitsubishi Corporation will provide relevant resources to support the company’s global expansion. It will also broaden access to key markets for ECF’s products, particularly for the Asian market. In return, this investment is in line with Mitsubishi Corporation’s formation of a mobility materials division focussed on advanced transportation solutions, including lightweight automotive structures – one of the largest markets for ECF’s products.

Under the agreement, Mitsubishi Corporation will promote the sales and marketing of ECF products through the company’s channels already engaged in the business of plastic resin sales. By uniting ECF’s advanced technology and proficiency in the metals reprocessing industry and Mitsubishi Corporation’s global network and broad interface with different industries, the companies aim to enhance the global business development and reliable supply of reprocessed carbon fibre by ECF.

The Target

ELG acquired ECF, previously known as Recycled Carbon Fibre Ltd, in 2011 and has since developed the business from an R&D operation into a global recycled carbon fibre business operating at an international scale out of the world’s first and largest carbon fibre recycling plant in Coseley, West Midlands, in the UK.

Whilst the company continues to optimise the patented carbon fibre reclaiming process, its primary focus is to develop and industrialise the conversion technologies to manufacture recycled carbon fibre products that can be reintroduced to the composites and compounding industries.

About ELG Haniel GmbH

ELG Haniel GmbH, a subsidiary of Franz Haniel & Cie. GmbH, the German family-owned group headquartered in Duisburg, Germany, is a global leader in the trading, processing and recycling of raw materials for the stainless-steel industry as well as high performance materials such as superalloys, titanium and carbon fibres. Its UK subsidiary, ELG Carbon Fibre Ltd, is a market leader in recycled carbon fibre materials.

About Mitsubishi Corporation

Mitsubishi Corporation (“MC”) is the largest Japanese trading house and it develops and operates businesses across virtually every industry, including industrial finance, energy, metals, machinery, chemicals, and daily living essentials. MC’s current activities have expanded far beyond its traditional trading operations to include investments and business management in diverse fields including natural resources development, manufacturing of industrial goods, retail, new energy, infrastructure, finance and new technology-related businesses. With over 200 offices and subsidiaries in some 90 countries and regions worldwide and a network of approximately 1,300 group companies, MC employs a multinational workforce of over 70,000 people.

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Ian Henderson