NewCo’s (Ovako) operations will consist of Rautaruukki’s long products subsidiaries Fundia Special Bar, Fundia Wire and Fundia Bar & Wire Processing, SKF’s subsidiary Ovako Steel and Wärtsilä’s subsidiary Imatra Steel. Ovako will be a leading European long steel producer of engineering steels to the rolling bearing, heavy vehicle, automotive and general engineering industries. The three contributed businesses complement each other well in terms of competencies. Ovako will be a strong company to the benefit of customers, employees and shareholders.
The shareholders will exchange their shares in the contributed companies into Ovako shares. Ovako will be accounted for as an associated company in its shareholders consolidated accounts. The transaction offers a structural solution for the shareholders to focus on their core businesses. In addition, the shareholders’ loans to Ovako will be reduced following the planned refinancing of Ovako’s interest bearing debts.
Ovako’s pro forma 2004 net sales amount to around EUR 1.3 billion and pro forma 2004 EBIT to EUR 86 million. Combined net capital employed amounts to EUR 533 million and total assets to EUR 836 million. Ovako had a pro forma total steel production of 2 Mt in 2004 and currently has 5,200 employees.
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