Outokumpu and Trinoxia, an Italian company controlled by Andrea Gatti, have signed in Helsinki the agreement on the joint venture for Outokumpu’s tubular unit (OSTP). Trinoxia will become a minority owner of OSTP with an option to become a majority owner in three years. The joint venture is expected to become effective from the beginning of October. Its purpose is to turn OSTP into a profitable entity.

Andrea Gatti was assisted by K Finance, Italian partner of Clairfield International, as financial advisor in this transaction and by Munari, Maniglio, Panfili e associati as legal advisor.

Outokumpu has been assisted by Summa Corporate Finance (Helsinki) as financial advisor and Vinge (Stockholm) as legal advisor.

The main terms of the agreement are according to the letter of intent, which was announced in July. In the first phase Tubinoxia will own 36% of the shares in OSTP. Additionally, it has an option to acquire shares up to 51% in a three years’ time period. Outokumpu has an option to redeem the shares initially acquired, at original value, if Trinoxia will not acquire the majority. It is also agreed that Outokumpu will remain OSTP’s main raw material supplier.

Andrea Gatti will assume the position of the CEO for OSTP. He has full trust and support from Outokumpu during the turn-around, which aims for a clear improvement in the performance of the business. The turnaround plan, which includes significant streamlining of the production structure, optimisation of the product portfolio and general cost reduction will be finalised during the coming weeks.

OSTP produces welded stainless steel process pipes and tubes as well as threaded and butt weld fittings. The business had in 2010 a turnover of about 200M, it currently employs some 970 employees and has 11 production sites in Sweden, Finland, USA, Saudi Arabia, Estonia and Canada. Its unit in Florida, USA, will not be part of the joint venture, but will remain fully owned by Outokumpu.