OM Group completes sale of its cobalt business for $325 million
April 15, 2013
The OM Group, Inc. based in Cleveland, Ohio, USA, has completed the previously-announced divestiture of its Advanced Materials division, which includes the production of extra fine cobalt powders and value-added nickel-based products. The division has been bought by a joint-venture consortium comprising Freeport-McMoRan Copper & Gold Inc., Lundin Mining Corp. and La Generale des Carrieres et des Mines (Gecamines) for $325 million cash, plus approximately $30 million for cash retained in the business, upon the closing of the transaction.
Following the sale, to assist the buyer of the downstream business with the ownership transition, the OM Group will act as an intermediary of cobalt supply between GTL and the Freeport joint venture under a two-year agreement subject to delivery of 7,000 MT of feed. The OM Group will also continue to serve as the US distributor for refined cobalt products for a period of one year.
The OMG Group reported an 8.1% increase in sales in 2012 to $1,637 million with the Advanced Materials division contributing 27%. In 2011, OMG Group acquired Vacuumschmelze (VAC), to provide a new growth platform in the Magnetic Technologies sector. The acquisition gives OMG access to diverse end markets using magnetic materials with a focus on technology and innovation and with potential growth paths. The Magnetic Technologies division contributed 39% to sales in 2012.