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Meridian Technologies to Merge with TMG

Sept. 5, 2007
Investors consolidating automotive magnesium diecasters

The parent of magnesium diecaster Meridian Technologies Inc. has agreed to combine the business with TMG International AB, another diecaster that is likewise owned by investor Jostein Eikeland. TMG is also described as a developer of magnesium diecasting technology for the automotive industry. It has manufacturing operations in Germany, Czech Republic, Germany, Czech Republic, Mexico, and Poland.

Meridian Technologies is described as the world's largest supplier of magnesium diecastings to the auto industry, listing BMW, Chrysler, Fiat, Ford, General Motors, LandRover, Opel, and Volkswagen among its customers. Its plants in Eaton Rapids, MI, Strathroy, ON, Sutton-in-Ashfield, England, Verrs, Italy, and Anting and Chongqing, China, produce magnesium instrument panel reinforcements (i.e., cross-car beams), front-end structures, steering column housings, 4WD transfer cases, and seat frames.

The business combination will be subject to a refinancing of TMGI, a reciprocal due diligence, and the approval of shareholders and lenders to both companies, according to a Meridian release.

Last December, Meridian was acquired from its joint-venture owners, Teksid SpA and Norsk Hydro ASA by Estatia A.G., a Swiss holding company controlled by Eikeland. At that time, Eiklund held a 28% stake in TMGI, or Tonsberg Magnesium Group International AB. Also investing in Meridian at that time was Landsbank of Iceland.

In a statement then, Eiklund said magnesium "… is set to be the metal of our times. It is far lighter than steel and aluminum, with the best strength to weight ratio of all three metals. With high oil prices set to remain, magnesium can significantly reduce the weight of, and hence improve the fuel economy of vehicles.

"With a cost advantage over aluminum,” Eiklund continued, “magnesium use in the automotive industry continues to grow over 10% per year. This offers a tremendous opportunity for us to build a global manufacturing base and brand that will be synonymous with the adoption of this metal throughout components manufacturing."