Starrag and Tornos Join Forces in Search of Success
Published: Thursday, Oct 26th 2023, 15:01
Updated At: Thursday, Oct 26th 2023, 20:32
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The Swiss traditional companies Starrag and Tornos have announced their merger. This move comes as no surprise, as the two companies have been working together for many years. The merger will create a leading provider of high-precision machining solutions for the aerospace, automotive, energy, and medical industries. The combined company will have a global presence, with operations in Europe, Asia, and the Americas. The merger is expected to create new opportunities for both companies and their customers.
If shareholders of Starrag and Tornos approve the merger at two extraordinary general meetings at the end of November, the deal could be finalized as early as the beginning of December. The merger would create the StarragTornos Group, a combined entity that is larger than either of the two companies alone.
It is expected that approval of the merger between the two companies will be a mere formality, as the well-known Walter Fust company, the major shareholder of the same-named electrical retail chain, stands behind both firms.
The announcement of the merger was positively received in the markets. Starrag's shares rose by 4.4 percent to 52.00 Swiss francs by 2 pm, while Tornos' shares remained unchanged. However, there was no major movement, as the two companies had already announced an examination of the merger in May this year. Market participants had been expecting or even demanding the move for some time.
No job cuts are planned.
Good news for the future 2000 employees of StarragTornos. There will be no job cuts, site closures or mergers, said the designated CEO and Chairman of the Board Michael Hauser on Thursday to the media.
After both companies had struggled a few years ago, they are now well positioned again. This was also decisive for the merger to take place now. "The merger is taking place from a position of strength," Hauser continued.
The two companies have very few overlaps in their respective fields of activity and global locations, making them a perfect fit for each other - another reason for their merger, according to the new CEO of the combined company.
Savings through synergies. Synergies refer to the combined effect of two or more entities working together to create a greater result than if they had worked separately. By combining resources, companies can achieve cost savings and increased efficiency.
Starrag and Tornos could become more efficient by working together. According to Hauser, the biggest advantage would be in purchasing. Both companies have around 170 shared suppliers and a combined purchasing volume of 260 million Swiss francs.
The potential for cost savings in the medium term for these and other costs is estimated to be between 5 and 10 million Swiss francs. The revenue synergies are expected to amount to 10 to 15 million Swiss francs, particularly due to the improved market presence.
The two companies are better prepared for further growth in America and Asia with combined forces. With a combined revenue of around 500 million Swiss francs, they are also catching up to the largest companies in the industry in Europe.
More than 100 years of tradition.
Starrag and Tornos both have roots that go back more than 100 years. Initially, Starrag produced threading machines for the textile industry. Later, the East Swiss company switched to milling machines.
Since the end of the 1990s, Starrag has diversified its portfolio through several acquisitions. Currently, the focus is on precision machine tools for the aerospace, energy, luxury goods, transportation and medical technology industries.
Tornos, founded in Moutier, Bern, Switzerland, initially produced machines for the production of small parts for the watch industry. Today, Tornos manufactures long-turning machines and multi-spindle turning machines for the automotive industry, medical technology, electronics, and still the watch industry.
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