Finland headquartered stainless steel giant Outokumpu has signed an agreement to divest the majority of the Long Products business operations to Marcegaglia Steel Group to focus on its core business of flat stainless steel products.Outokumpu President & CEO Mr Heikki Malinen said “This divestment marks the accomplishment of the turnaround program for the Long Products business in the past two years. With Marcegaglia, we have found a responsible and committed owner to develop Long Products business even further. The sale is a natural step for Outokumpu in line with our strategy to focus on our core business, stainless steel flat products.” The sales of Long Products accounted for approximately 8% of the Outokumpu Group's sales in 2021. The transaction includes Long Products melting, rod and bar operations in Sheffield in UK, bar operations in Richburg in US and wire rod mill in Fagersta in Sweden. The transaction does not include Outokumpu Long Products AB operations in Degerfors and Storfors in Sweden. Approximately 650 employees in Sheffield, Richburg and Fagersta will transfer to the buyer as a part of the transaction. Outokumpu Long Products AB’s units in Degerfors and Storfors in Sweden continue their operations for now as part of the Outokumpu Group, and different options are to be evaluated for the future of the units. The total consideration on a debt and cash free basis amounts to EUR 228 million implying an EV Adjusted 2021 EBITDA multiple of 4.9x. In the January–September 2022 interim report, Outokumpu will classify its Long Products businesses to be divested as assets held for sale, report the businesses as a discontinued operation and based on preliminary assessment, impairment of some EUR 50 million would be recognized, subject still to final review. Outokumpu expects to complete the divestment by the end of this year. The completion of the transaction is subject to customary closing conditions and regulatory approvals by the competition authorities and requires for instance internal structuring before completion. The transaction will be carried out as a share sale.
Finland headquartered stainless steel giant Outokumpu has signed an agreement to divest the majority of the Long Products business operations to Marcegaglia Steel Group to focus on its core business of flat stainless steel products.Outokumpu President & CEO Mr Heikki Malinen said “This divestment marks the accomplishment of the turnaround program for the Long Products business in the past two years. With Marcegaglia, we have found a responsible and committed owner to develop Long Products business even further. The sale is a natural step for Outokumpu in line with our strategy to focus on our core business, stainless steel flat products.” The sales of Long Products accounted for approximately 8% of the Outokumpu Group's sales in 2021. The transaction includes Long Products melting, rod and bar operations in Sheffield in UK, bar operations in Richburg in US and wire rod mill in Fagersta in Sweden. The transaction does not include Outokumpu Long Products AB operations in Degerfors and Storfors in Sweden. Approximately 650 employees in Sheffield, Richburg and Fagersta will transfer to the buyer as a part of the transaction. Outokumpu Long Products AB’s units in Degerfors and Storfors in Sweden continue their operations for now as part of the Outokumpu Group, and different options are to be evaluated for the future of the units. The total consideration on a debt and cash free basis amounts to EUR 228 million implying an EV Adjusted 2021 EBITDA multiple of 4.9x. In the January–September 2022 interim report, Outokumpu will classify its Long Products businesses to be divested as assets held for sale, report the businesses as a discontinued operation and based on preliminary assessment, impairment of some EUR 50 million would be recognized, subject still to final review. Outokumpu expects to complete the divestment by the end of this year. The completion of the transaction is subject to customary closing conditions and regulatory approvals by the competition authorities and requires for instance internal structuring before completion. The transaction will be carried out as a share sale.
