Rare Earths: Luxfer Holdings purchases Neo Performance Materials for US$612M

Luxfer

Luxfer Holdings has signed a definitive agreement to purchase Canada and China-based Neo Performance Materials (NPM), adding to Luxfer’s production capabilities for high technology materials and products including NdFeB magnet alloys. The purchase will be comprised of approximately US$244M in cash, equivalent to US$5.98 per NPM share, and a further US$367M in shares. Combined revenue of the two companies is estimated to approach US$950M.

Roskill view

The purchase of NPM gives Luxfer not only greater capabilities in the rapidly growing Asian technology materials market, as NPM operates facilities in China, Thailand and South Korea, but also access to a semi-integrated rare earth supply chain from rare earth processing through to metal and magnet alloy powder production. NPM also holds the patents to produce a range of bonded and hot-deformed NdFeB magnet powders and considerable research and development capacity to develop new magnet products.

Demand for high-performance NdFeB magnets, used in applications including the drivetrains of electric vehicles, production-line robots and wind turbines, is forecast to grow by 7.3%py over the coming decade according to Roskill forecasts. Despite the strong growth in demand forecast, Luxfer will likely face increasing competition from Chinese NdFeB manufacturers, included fully integrated producers such as China Northern Rare Earths Group, which has increased NdFeB alloy and magnet production capacity significantly in 2018. NPM’s processing facilities in China have struggled to source sufficient feedstock to operate in recent years as the Chinese domestic industry has consolidated and become increasingly integrated, an issue which Luxfer will undoubtedly have to combat.

Roskill’s new Rare Earths: Global Industry, Markets & Outlook report was published in December 2018 and includes supply, demand and price forecasts out to 2028, along with profiles of major producers, processors and end-users. Click here to download the brochure and sample pages, or to access further information.