Italian re-roller Marcegaglia has agreed to acquire Outokumpu’s Long Products division for €228 million ($228.1m). The transaction, which represents Marcegaglia’s first foray into steelmaking, should be completed by the end of the year.
The deal includes an electric arc furnace mill for specialty steels, a wire rod rolling plant and bar production plant in Sheffield, UK, a bar production plant in Richburg, US, and a wire rod mill in Fagersta, Sweden. The transaction does not include Outokumpu Long Products AB operations in Degerfors and Storfors, Sweden.
In 2021, the Long Products division achieved revenue of €810m, with Ebitda of €47m. It employs about 700 workers.
Marcegaglia, one of the world’s largest steel processing companies, is therefore taking its first step towards becoming a steel producer, thanks to a partial upstream integration of its specialty steel re-rolling business. President Antonio Marcegaglia tells Kallanish the move is aimed at boosting its special steels business production range, shortening the supply chain, and reaching international markets in Europe and North America with a competitive product offering.
Outokumpu now intends to focus on its core business of flat stainless steel products. The sales generated by Long Products accounted for approximately 8% of the Outokumpu Group’s revenue in 2021.