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:: Boliden and Outokumpu to Create a World-leading Mining and Smelting Company
Boliden and Outokumpu have signed a Letter of Intent whereby Boliden intends to acquire Outokumpu's mining and smelting operations within zinc and copper and to sell its Fabrication and Technology Sales units to Outokumpu. Through the transaction, Outokumpu will become a major shareholder in New Boliden.
As a result of the transaction, New Boliden will become one of the world's leading smelting companies and the fourth largest zinc mining company in the world. The combination will also create a stronger company with increased financial and operational flexibility and potential for future growth.
The assets, which Boliden intends to acquire from Outokumpu will double the size of Boliden, and are:
"The transaction is industrially logical and is fully justified in view of the continuing consolidation of the global mining and smelting industry. In New Boliden, world-class assets are now being combined, which with increased competitive strength from a strong Nordic base, will be able to create long-term profitability and substantial growth potential. New Boliden will also get a strong industrial owner with long experience and extensive knowledge of the mining and smelting industry. All this will create added value for shareholders, customers and employees", says Jan Johansson, President and CEO of Boliden.
"Outokumpu´s strategy emphasises profitable growth in market growth businesses and moving in the metals chain towards more value added products and services. Through this transaction, we will further focus on growth within our main areas of activity - stainless steel and value-added copper products - with enhanced financial flexibility. At the same time, we see significant potential in our ownership in New Boliden", says Jyrki Juusela, Outokumpu CEO.
The parties are proposing, that the Board of Directors of New Boliden will initially comprise four Outokumpu nominees, three nominees of present Boliden shareholders as well as personnel representatives. The Chairman of the Board will be elected amongst Outokumpu nominees. Mr. Carl Bennet, currently Chairman of the Boliden Board, will be appointed Vice Chairman. Mr. Jan Johansson, CEO of Boliden will continue as CEO of New Boliden and also be a member of the Board. Mr. Tom Niemi from Outokumpu will be appointed Deputy CEO.
The operative management team of New Boliden is proposed to comprise the following persons: CEO Mr. Jan Johansson, Deputy CEO Mr. Tom Niemi, CFO Mr. Jan Öhman, President Copper Mr. Jukka Järvinen, President Zinc Mr. Harri Natunen, President Mining Mr. Svante Nilsson and Commercial Director Mr. Lars-Göran Björkqvist.
A final sales and purchase agreement is expected to be signed by the parties when the final terms and financing of the transaction have been settled. This is expected to take place in October 2003. As a whole the transaction is expected to be completed by year-end 2003. The transaction is subject to, among others, approvals by the Boards of Directors of Boliden and Outokumpu, approval from Boliden´s shareholders and financing being in place. In addition, approval will have to be obtained from the relevant competition authorities.
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