Sandvik signs agreement to divest mining systems operations

18 July 2016 (Last Updated July 18th, 2016 18:30)

Sandvik has signed an agreement to sell its mining systems operations to private equity company CoBe Capital.

Sandvik has signed an agreement to sell its mining systems operations to private equity company CoBe Capital.

Its mining systems unit was listed in the Sandvik's income statement as having discontinued operations.

Sandvik will maintain ownership of ongoing projects that are close to finalisation.

Completion of the deal is expected during the fourth quarter of 2016, after meeting certain conditions.

"Divesting the mining systems is an important step in consolidating Sandvik to its core operations."

The two firms have agreed to not disclose the purchase price.

Sandvik president and CEO Björn Rosengren said: “Divesting the mining systems is an important step in consolidating Sandvik to its core operations, which for Sandvik Mining and Rock Technology is high-technology mining equipment and aftermarket offerings.”

The deal includes a capital loss of Skr800m ($93.4m), impacting the result of Sandvik’s discontinued operations for the third quarter of 2016.

The capital loss comprises a negative cash-flow impact of Skr600m ($70m), primarily in relation with closure of the deal.

Mining Systems provides design and engineering of material handling systems for the mining industry.

In 2015, the Mining Systems had 1,100 employees and reported annual sales of Skr5bn ($584m), which accounts for 6% of Sandvik Group revenues.