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Outokumpu Completes Acquisition of Italian Stainless Distributor Sogepar
08/01/2008 - Outokumpu completes its announced acquisition of the SoGePar Group, an Italian distributor of stainless steel, following receipt of regulatory clearances.
Outokumpu has completed its previously agreed-to acquisition of the SoGePar Group, an Italian distributor of stainless steel, from its owners, the Borromeo family, following receipt of regulatory clearances. Outokumpu paid EUR 215 million in cash and took on debt in the company in the amount of EUR 120 million.
Outokumpu will now commence its work to integrate the SoGePar units into its sales and marketing organization. To facilitate a smooth transition, the company has established a number of joint integration teams. SoGePar will be consolidated into Outokumpu’s accounts as of August 1, 2008.
SoGePar currently operates stainless steel service centers in Castelleone in Italy and in Rotherham in the U.K. SoGePar also has stock operations in Italy, the U.K., Belgium, Finland, France, and Ireland, as well as a commercial office in Germany and a representative office in Turkey. Sales of the SoGePar Group in 2007 amounted to EUR 560 million, operating profit to EUR 44 million and deliveries to 134 000 tons.
The acquisition of SoGePar enables Outokumpu to better serve its customers through the expanded service center network. The acquisition will also help Outokumpu expand its customer base and positively develop end-user and project sales, which in turn should bring more stability.
The acquisition is a determined step towards Outokumpu's strategic ambition of building a more stable and profitable business model for the Group. According to the company, it will significantly strengthen Outokumpu's position in stainless steel distribution in Italy, which, together with Germany, is the largest market for stainless steel in Europe.
Following the acquisition Outokumpu's annual stock and processing capacity in Italy and the U.K. will be in excess of 240,000 tonnes. In total, with the SoGePar acquisition and the on-going service center investments, Outokumpu's global annual stock and processing capacity will increase from the current 300,000 tonnes to in excess of 740,000 tonnes by 2010.
