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Highlights
Morgan Advanced Materials has reached an agreement with Vesuvius for the sale of its Molten Metal Systems business.
The deal includes both Morgan’s stake in Morganite Crucible India and the remainder of the MMS operations.
The disposal is in line with Morgan’s plan to simplify operations and focus on faster growing markets.
Morgan Advanced Materials plc (LON:MGAM), part of the FTSE 350 today, has confirmed an agreement to divest its Molten Metal Systems unit to Vesuvius plc (LON:VSVS). The agreement covers Morgan’s controlling interest in Morganite Crucible India as well as other MMS operations located in different regions. Completion is anticipated in the early part of October.
The transaction will deliver value to Morgan through both new equity and cash. In return for its holding in the Indian subsidiary, Morgan will receive newly issued shares in Foseco India, which is a listed entity of Vesuvius in India. Additionally, Morgan will gain cash proceeds for the remainder of MMS operations outside India.
Strategic Rationale
Morgan described the disposal as part of its ongoing simplification program. By exiting the MMS operations, the company aims to sharpen focus on markets with stronger growth dynamics. The removal of MMS from the portfolio is aligned with the objective of enhancing returns while ensuring resources are channelled into areas that deliver higher margins and scale advantages.
The business being sold has historically been positioned within Morgan’s Thermal Products segment. It specialises in crucibles and melting solutions for non-ferrous metals including aluminium, copper, brass, bronze, zinc, and certain precious metals.
Financial Aspects
MMS contributed a modest share to the Thermal Products segment. Revenue contribution from MMS represented a small portion of the wider Group total, while adjusted operating profit was also a relatively limited proportion of the segment. The agreed sale price reflects a multiple of the last reported adjusted operating profit, highlighting that Morgan has secured strong value relative to recent financial performance.
Morgan’s proceeds will comprise newly issued shares in Foseco India, which will result in a minority holding in that entity. The company confirmed that these shares will be subject to a lock-up period following completion in accordance with Indian market rules. Alongside the equity component, Morgan will receive cash consideration for MMS operations outside India. The total gross value of the transaction equates to a significant uplift on the earnings base of MMS.
Transaction Structure
The disposal is split into two connected agreements. The first covers the transfer of Morgan’s stake in Morganite Crucible India to Foseco India through a share exchange mechanism. The second agreement covers the cash acquisition of MMS operations outside India directly by Vesuvius.
The share exchange ratio for the Indian element was set in line with Indian regulatory requirements. This ensures compliance with local market rules while giving Morgan a stake in a larger, more liquid Indian entity compared with its prior position in Morganite Crucible India.
Approvals and Completion
The Indian element of the disposal remains conditional on approval by Foseco India shareholders. Vesuvius, through its ownership position in Foseco India, has undertaken to vote in favour of the proposal. The transaction does not require shareholder approval from either Morgan Advanced Materials or Vesuvius at the group level.
Morgan highlighted that the agreement demonstrates disciplined portfolio management. The Group believes this move positions it more clearly towards its strategic path, with proceeds creating financial flexibility for future growth initiatives and shareholder returns.
