Stainless steel producer Outokumpu has divested a majority of its Long Products business, through signing an agreement to divest these operations in Degerfors and Storfors to Cogne Acciai Speciali, leading producer of long stainless steels and nickel alloys based in Italy. The enterprise value of the transaction is EUR 12 million and the divestment is expected to be complete in a couple of months.
Outokumpu has recently divested the majority of its Long Products business. The company 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. 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.
The reported enterprise value of the transaction is EUR 12 million, with a positive cash impact for Outokumpu. However, Outokumpu booked a loss of approximately EUR 30 million based on the current estimates of the consideration. 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.
Also Read: Jindal Industries Private Limited Hissar 500,000 TPA Plus Greenfield Tube Plant Project in Ballari, Karnataka
“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 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.