Outokumpu sells remainder of longs division

Outokumpu has signed an agreement to divest the remainder of its Long Products division, the units in Degerfors and Storfors, Sweden, to Italian stainless steel longs and nickel alloys producer Cogne Acciai Speciali.

The transaction, carried out as a share sale, should be completed within a couple of months, subject to customary conditions including competition approval.

At the beginning of the year, the Finnish steelmaker completed the divestment of the majority of its Long Products division, excluding Degerfors and Storfors, to Italian re-roller Marcegaglia (see Kallanish passim). The remaining two units have continued operating within the Outokumpu Group, while the firm evaluated different options for their future.

“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 Outokumpu head of M&A Matti Louhija.

The enterprise value of the transaction is €12 million ($13m) and it has a positive cash impact for Outokumpu. However, Outokumpu is booking a loss of approximately €30m 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, the steelmaker says.

Outokumpu’s other operations in Degerfors are not affected by the divestment.

Adam Smith Poland