FLSmidth sells cement business and soars on the stock exchange
FLSmidth has been looking for a buyer for its cement division for almost a year and a half. Now an agreement has been reached.
The Danish industrial group FLSmidth has entered into an agreement to sell its cement business.
FLSmidth writes this in a company announcement.
The sale is to a subsidiary of the private equity fund Pacific Avenue Capital Partners, and the price is up to 1.1 billion kroner.
FLSmidth will initially receive around 550 million kroner for the business. However, in addition to the price, an additional 550 million kroner may be paid if certain undisclosed results are achieved, it is said.
FLSmidth announced in January 2024 that it was actively looking for a buyer for the part of the business that supplies to the cement industry.
After the initial work, the company’s CFO, Roland Andersen, said that it was hoped that a sales contract could be signed before the end of 2024.
Later it was announced that the expectation was that a sale could take place at the earliest at the end of 2024.
Aktien stiger
After the sale was announced on Friday afternoon, the stock rose over six percent.
The sale will allow FLSmidth to increase its focus on the part of the business that sells technology and services to the mining industry.
“The divestment allows us to sharpen our focus on our core business within mining and position FLSmidth as a pure leader in the mining industry,” says CEO Mikko Keto in the announcement.
The transaction includes all relevant employees, assets, intellectual property rights and technology.
FLSmidth expects the transaction to be completed in the second half of 2025.
Following the announcement of the sale agreement, FLSmidth has also announced that it is initiating a share buyback of up to DKK 1.4 billion. The buyback will take place before the next general meeting, which is expected to be held on 24 March 2026.
FLSmidth has not initiated a share buyback program since 2012.
Share buybacks are a way for a company to distribute profits to shareholders in line with dividends.
It works by the company buying shares on the stock exchange and then canceling them. This way, the value of the remaining shares becomes more valuable because the pie becomes smaller.
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