Outokumpu divests remaining its Long Products operations in Sweden
by David Fleschen
Outokumpu divested the majority of its Long Products business in the beginning of the year. Outokumpu Long Products AB’s units in Degerfors and Storfors in Sweden were not part of the deal and continued their operations as part of the Group, while Outokumpu evaluated different options for the future of the units. Outokumpu has signed an agreement to divest these operations in Degerfors and Storfors to Cogne Acciai Speciali, a world leader in the production of long stainless steels and nickel alloys based in Italy.
“Our priority has been to find a buyer also for the remaining long products operations in Degerfors and Storfors. We are pleased that in Cogne Acciai Speciali we have a found a responsible new owner for these operations as well. At the same time, the divestment is a further natural step for Outokumpu in line with our strategy to focus purely on our core business, stainless steel flat products and ferrochrome,” says Matti Louhija, Head of M&A at Outokumpu.
The enterprise value of the transaction is EUR 12 million and it has a positive cash impact for Outokumpu. However, Outokumpu books a loss of approximately EUR 30 million based on the current estimates of the consideration. The amount of the book loss is also subject to the closing accounts and final accumulated translation difference. It will be recorded in the quarter when the transaction is completed.
Outokumpu expects to complete the divestment in a couple of months. The completion of the transaction is subject to customary closing conditions and regulatory approvals by the competition authorities. The transaction will be carried out as a share sale. Outokumpu's other operations in Degerfors are not affected by the divestment.
Source and Photo: Outokumpu