Grupo FerroAtlantica, Globe announce $3.1B merger

Metals and mining firms Grupo FerroAtlantica and Globe Specialty Metals have entered an agreement to combine their businesses in an all-stock deal to form a company with an enterprise value of $3.1 billion.

Both companies have focused on the fast-growing market for silicon for solar panels, Alan Kestenbaum, Globe's executive chairman, told CNBC on Monday. While solar panel fabrication used to account for about 1 percent of the world's silicon, it now consumes about 10 percent to 15 percent of the production, he said.

"Coming together will give us a tremendous amount of ability to draw synergies and continue to grow the business," he said in a "Squawk Box" interview.

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Grupo FerroAtlantica is a producer of silicon metal, silicon alloys and ferroalloys and derives most of its revenue from Europe. Globe Specialty Metals makes silicon metal and silicon-based alloys, primarily for the North American market.

The companies say they are positioned to take advantage of growth in the solar, automotive, consumer products, construction and energy sectors.

The combined company will operate 26 production facilities and five mining sites and employ 4,700 people around the world, according to a joint press release.

Kestenbaum said he bought Globe out of bankruptcy about 10 years ago for roughly $1 million. At the time, it had about 200 employees. After rebuilding the company, he took it public in 2009. It now has 1,500 employees and a market capitalization of nearly $1.2 billion.

About 50 percent of Globe's business is producing silicone, which goes into products like calking, cosmetics and food, Kestenbaum said. The other 50 percent is made up of aluminum and solar.

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Grupo FerroAtlantica is wholly owned by Grupo Villar Mir, one of Spain's largest companies.

The deal comes at an opportune time because the U.S. dollar's strength is creating headwinds for American companies that sell their products abroad, Kestenbaum said. At the same time, Europe is preparing to launch a bond-buying program that should keep interest rates low and weaken the euro.

"We've got now a platform that doesn't have to be that concerned anymore with the movements of currencies because now we're going to be able to be successful whether the dollar is up, whether the dollar is down," he said.