Dow Jones quoted Mr Mika Seitovirta CEO of Outokumpu Oyj as saying that its planned takeover of Inoxum will help it better compete with low cost producers from Asia.

He said that he expects synergies and plans to reduce melt shop and cold rolling capacities in Germany and Sweden will bring down costs and improve capacity utilization at the remaining plants.
Mr Seitovirta said that capacity utilization is expected to increase to between 85% and 95% after the integration of Inoxum, from 70% to 75% at present. He didn't say when the combination of Outokumpu and Inoxum will become profitable.

ThyssenKrupp and Outokumpu said they agreed on a sale of Inoxum in a transaction that values the operations at around EUR 2.7 billion and creates the world's largest stainless steel producer.

Outokumpu said that under the deal, which requires antitrust approval, Outokumpu will pay ThyssenKrupp EUR 1 billion in cash, issue the Germany company with new Outokumpu shares representing 29.9% of total share capital, grant a loan note of EUR 235 million to ThyssenKrupp and assume EUR 422 million of Inoxum's debt.

The deal foresees the gradual closing of 1.4 million tonnes of annual melt shop capacity at German plants in Krefeld and Bochum.

ThyssenKrupp's CFO Mr Guido Kerkhoff said that the transaction isn't likely to close swiftly, as European Union regulators are expected to conduct an in depth investigation of the deal that could take up to nine months to conclude.

The transaction is expected to close in the fourth quarter 2012.

(Sourced from www.dowjones.com)