Outokumpu confirms agreement in principle with ThyssenKrupp to create a global stainless steel leader
STOCK EXCHANGE RELEASE
31 January 2012 at 12.20 pm EET
Outokumpu confirms that it has reached an agreement in principle in its
negotiations with ThyssenKrupp to combine Inoxum, the stainless steel unit of
ThyssenKrupp, with Outokumpu under the operational leadership of Outokumpu. This
is pending the approval of Outokumpu's Board of Directors later today and
execution of definitive agreements.
The agreement reached with the German labor representatives overnight marks a
significant milestone in the negotiations. Specifically, it covers the following
areas:
- Closure of the Krefeld meltshop by end of 2013.
- The melt shop in Bochum will be preserved until the end of 2016.
- No compulsory redundancies in German production sites until end of 2015.
- Planned total reduction of 850 jobs in Germany of which ThyssenKrupp has
committed to offer alternative jobs within ThyssenKrupp for up to 600 of current
Inoxum employees.
According to the tentative agreement reached with ThyssenKrupp, the transaction
would value Inoxum at an enterprise value of EUR 2.7 billion. The Consideration
for Inoxum would comprise a cash payment of EUR 1 billion, new Outokumpu shares
representing 29.9% of total share capital (post rights offering and directed
share issue to ThyssenKrupp), a loan note of EUR 235 million (initial value) to
be issued to ThyssenKrupp and the assumption by Outokumpu of certain liabilities
of Inoxum of EUR 422 million. In connection with the transaction, Outokumpu
plans to conduct a fully underwritten rights offering of EUR 1 billion,
supported by certain key shareholders.
The combination would create significant cost synergies, starting in 2014 and
estimated to reach a run-rate of EUR 225-250 million p.a. by 2017 at the latest.
Any definitive agreement would be subject to customary closing conditions
including regulatory approvals.
For more information, please contact:
Kari Tuutti, SVP - Communications and Investor relations,
tel. +358 9 421 2432
kari.tuutti@outokumpu.com
OUTOKUMPU OYJ
Outokumpu is a global leader in stainless steel with the vision to be the
undisputed number one. Customers in a wide range of industries use our stainless
steel and services worldwide. Being fully recyclable, maintenance-free, as well
as very strong and durable material, stainless steel is one of the key building
blocks for sustainable future. Outokumpu employs some 8 000 people in more than
30 countries. The Group's head office is located in Espoo, Finland. Outokumpu is
listed on the NASDAQ OMX Helsinki.www.outokumpu.com
Disclaimer
The information contained herein shall not constitute an offer to sell or the
solicitation of an offer to buy, nor shall there be any sale of the securities
referred to herein in any jurisdiction in which such offer, solicitation or sale
would be unlawful prior to registration, exemption from registration or
qualification under the securities laws of any such jurisdiction. These written
materials do not constitute an offer of securities for sale in the United
States, nor may the securities be offered or sold in the United States absent
registration or an exemption from registration as provided in the U.S.
Securities Act of 1933, as amended, and the rules and regulations thereunder.
There is no intention to register any portion of the offering in the United
States or to conduct a public offering of securities in the United States. The
issue, exercise or sale of securities in the offering are subject to specific
legal or regulatory restrictions in certain jurisdictions. Outokumpu assumes no
responsibility in the event there is a violation by any person of such
restrictions. This release includes forward-looking statements. By their nature,
forward-looking statements involve known and unknown risks, uncertainties and
other factors because they relate to events and depend on circumstances that may
or may not occur in the future. Outokumpu cautions you that forward-looking
statements are not guarantees of future performance and are based on numerous
assumptions and that its actual results of operations, financial condition and
liquidity and the development of the industry in which Outokumpu operates, may
differ materially from (and be more negative than) those made in, or suggested
by, the forward-looking statements contained in this release.