Outokumpu sells its long products operations in Sweden

Finland-based metals producer Outokumpu Oyj says it has divested the majority of its stainless steel Long Products business in the first quarter of this year. The company says it has signed an agreement to divest its operations in Degerfors and Storfors, Sweden, to Italy-based Cogne Acciai Speciali, which it describes as a “a world leader in the production of long stainless steels and nickel alloys.”

“Our priority has been to find a buyer for the remaining long products operations in Degerfors and Storfors,” says Matti Louhija, head of M&A at Outokumpu. “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.”

Outukumpu says Cogne Acciai Speciali paid 12 million euros ($13.1 million) for the mills, and says the transaction “has a positive cash impact” on its balance sheet.

However, Outokumpu says the transaction entails a balance sheet loss of approximately 30 million euros ($32.8 million) based on its current estimates and that the loss “will be recorded in the [financial] quarter when the transaction is completed.”

Outokumpu says it expects to complete the divestment “in a couple of months.” The completion of the transaction is subject to regulatory approvals and will be carried out as a share sale. Outokumpu says its other operations (including stainless steel plate production) in Degerfors are not affected by the divestment.