Lennox International and Outokumpu Group Announce Agreement to Form Joint Venture

Lennox International Inc. has entered into a memorandum of agreement for the formation of a joint venture with Outokumpu Oyj of Finland. Outokumpu will purchase a 55% interest in LII’s heat transfer business segment for $55 million, with LII retaining 45% ownership. After a period of three years, Outokumpu will have the option to purchase the remainder of the business contingent upon several factors, including operating performance of the joint venture. The agreement has been approved by the board of directors of both companies and is contingent upon regulatory approvals. As part of the agreement, a separate, 50-50 technology partnership will be established to strengthen the leadership position in heat transfer technology for both partners. “We are partnering with the Outokumpu Group to realize synergies between the two companies,” says Bob Schjerven, Lennox CEO. “This joint venture brings together the resources and reach of two highly respected global businesses, both leaders in their respective technologies. Merging these two adjacent links in the supply chain will drive unparalleled efficiencies in customer service and working capital reduction. This partnership will also allow Lennox to focus on strengthening our branded finished goods business segments and improving our effectiveness in providing value-added products and services in our core heating, cooling and refrigeration markets.” “Outokumpu has been supplying air-conditioning and refrigeration tubing to LII for several years,” says Kalevi Nikkila, president of Outokumpu Copper Products Oy. “We intend to develop Outokumpu Copper Products, our copper tubing products business, further down the value chain. The partnership with Lennox will allow us to expand beyond copper tubing into new geographic markets and product offerings.” Included in the joint venture agreement are the OEM and Commercial Coil plants in Grenada, MS; the heat transfer plant in Juarez, Mexico; European heat transfer operations in Cremieu, France, Torreglia, Italy, and Prague, Czech Republic; and Livernois Engineering in Dearborn, MI. Outokumpu Copper Products is part of The Outokumpu Group, global leaders in the non-ferrous metals and stainless steel industries. Its main customers are in the electrical, heat transfer, telecommunications, building and construction, and automotive industries. Outokumpu operates manufacturing facilities in the United States, Finland, Sweden, Holland, Spain, China, Malaysia, Thailand, Austria, and Great Britain.

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