Outokumpu has signed an agreement to divest the majority of the Long Products business operations to Marcegaglia Steel Group, a leading industrial group worldwide in the steel processing sector. Outokumpu will now focus on its core business of flat stainless steel products.
“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,” says Heikki Malinen, President and CEO at Outokumpu.
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 will publish comparable historical financial information for January–September 2021 in connection with its January–September 2022 interim report. In the 2022 half-year report Outokumpu will consider the divestment as a non-adjusting event after the end of the reporting period and will disclose it in the notes to the half-year report.