FAQ's on Nickel Divestiture
Q: Why sell the nickel business now?
A: We believe this is an ideal time in the base metals cycle to exit the nickel business and capture full and fair value for this asset. We expect this transaction to help OM Group achieve three mission-critical objectives:
Q: When will the transaction and transition to new ownership be completed?
A: The transaction closed on March 1, 2007. Now that the sale is complete, we anticipate a rapid and seamless transition to the new ownership.
Q: How will the sale affect customers?
A: OMG is committed to ensuring business as usual for its nickel customers throughout the transition period, and we expect the changeover to new ownership to be seamless. We are confident that Norilsk, one of the world's leading producers of nickel and other metals for industrial use, will provide customers with continuing high levels of service. Other customers of OMG will not be affected, except by the long-term benefits of having a relationship with a stronger, more focused company.
Q: How will the sale affect employees?
A: We expect the change in ownership to have little or no effect on employees of the nickel business.
Q: How will proceeds from the sale be used?
A: We expect to use proceeds from the sale, in part, to fund future acquisitions that will grow our value-added specialty products business and to accelerate new product development. We are considering other options for use of the proceeds that would create shareholder value, position the company for growth, further strengthen our balance sheet and enhance our financial flexibility.
Q: Why is OMG focusing on value-added specialty products?
A: We believe these product lines offer us greater opportunities to leverage our core strengths and grow OMG. Our goal is to deliver predictable, sustainable financial results and build long-term value for our shareholders.
Q: How does OMG plan to grow the value-added specialty products businesses?
A: We plan to grow primarily through strategic acquisition and new product development.
Q: How will OMG satisfy its needs for nickel as a raw material following the sale?
A: We have entered into five-year supply agreements obligating Norilsk to provide OMG with various cobalt and nickel-based materials. Thus, we have diversified and shortened our supply chain, secured a stable supply of cobalt metal and forged a synergistic partnership that allows us to leverage our cobalt-based refining and chemicals expertise with Norilsk's cobalt-mining and processing capabilities.
