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(Reuters) - Finnish stainless steel maker Outokumpu Oyj has signed an agreement to divest the majority of its Long Products business to Italy's Marcegaglia Steel Group for 228 million euros ($228.73 million), the company announced on Tuesday.
Outokumpu said it will focus on its core business of flat stainless steel products and expects to complete the divestment by the end of this year.
The company's Long Products unit, which makes items like wire rods and rebars, accounted for about 8% of the Outokumpu Group's sales in 2021.
Based on preliminary assessments, Outokumpu will have an impairment charge of 50 million euros ($50.16 million) related to the divestment in its January-September 2022 interim report.
The company said it does not expect any material gain or loss on the deal, in addition to the impairment loss which will be recorded in its third-quarter results.
The deal includes Long Products' melting, rodand bar operations in Sheffield, England, bar operations in Richburg, United States and a wire rod mill in Fagersta, Sweden.
Outokumpu said around 650 employees in Sheffield, Richburg and Fagersta will transfer to Marcegaglia Steel. The company will retain its Long Products operations in Degerfors and Storfors, Sweden.
Last month, the stainless steel maker said it aimed to increase its earnings before interest, tax, depreciation and amortisation (EBITDA) by 200 million euros by the end of 2025.
($1 = 0.9968 euro)
(Reporting by Shivani Tanna in Bengaluru; Editing by Josie Kao)