Sylvania Resources and Ruukki have cancelled their planned R2.9 billion merger, it emerged on Friday (23rd October).

The two companies had originally announced the deal in June, with the Finnish firm intending to purchase the entire issued shared capital of the platinum junior.

However, Ruukki CEO Alwyn Smit revealed in an interview with Mining Weekly that the transaction was ultimately scuppered by the failure to secure regulatory approval.

In addition, he noted that Sylvania's acquisition of interests in SA Metals and Great Australian Resources meant that the implementation process would not have been completed until April 2010.

He told the news provider: "We believe we have an answer to the technology requirements between Sylvania and ourselves, but we [were] not in a position to test or try it out until the merger was completed.

"We started feeling that this was holding up the process for so long that we could lose out."

However, Mr Smit also confirmed that the two parties are now pursuing a joint venture, which would be more favourable as it would involve bypassing regulators.

He explained that this option would still provide a chance to "prove to ourselves and the world that the technology we think we can apply, can work".

Ruukki, which supplies metal-based components and integrated systems to the construction and mechanical engineering industries, currently has operations in 26 countries.

Sources:

UPDATE1-Sylvania Resources, Ruukki terminate merger (23/10/09)

Sylvania, Ruukki to pursue JV after terminating R2,9bn merger (23/10/09)

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