Kloeckner, the German metal trader, revealed plans on Friday to divest segments of its European commodity distribution business to Spain’s Hierros Anon SA in a strategic move to offload its struggling national entities in France, the United Kingdom, the Netherlands, and Belgium.
The proposed divestment involves companies employing approximately 1,500 individuals, as disclosed by Kloeckner in an official statement.
Anticipating a favorable impact on the group’s earnings before interest, taxes, depreciation, and amortization (EBITDA) starting from 2024, Kloeckner outlined expectations for this forthcoming deal. However, the company cautioned about an anticipated one-time adverse impact on group equity, estimating it to hover around 210 million euros ($231.06 million). This estimation is based on the current equity valuation of the national companies and further expected deconsolidation effects.
While specific details regarding the purchase price remain undisclosed, Kloeckner outlined the anticipated closure of this transaction in the first half of 2024.
The move signifies Kloeckner’s strategic shift aimed at optimizing its portfolio by divesting loss-making entities within its European commodity distribution arm. This divestment strategy is expected to pave the way for a more streamlined and potentially strengthened operational focus moving forward.
