ACHRNEWS

Apr. 23, 2002: Lennox International And Outokumpu Group Announce Joint Venture

April 23, 2002
DALLAS, TX — Lennox International Inc. announced that it 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 Lennox’s heat transfer business for $55 million, with Lennox 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 venture.

The agreement, which has been approved by the board of directors of both companies, is expected to be completed by mid-year 2002, depending on regulatory approvals. As part of the agreement, a separate 50-50 technology partnership will also be established.

“We are partnering with the Outokumpu Group to realize synergies between the two companies,” stated Bob Schjerven, ceo of Lennox. “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 Lennox for several years,” said 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.

Publication date: 04/22/2002