Sims has agreed to sell its UK metals business to Unimetals Group for £195m.
The company said the sale resulted from a review that began in November 2023 after posting a 10.8% drop in sales revenue. The deal is subject to regulatory approval.
“We conducted a comprehensive strategic review of UK Metals, evaluating all options, including a sale, forming a joint venture or restructuring the business,” said chief executive Stephen Mikkelsen.
“The board concluded that a sale provided the optimal outcome for Sims and its shareholders.”
The company said the sale represented a significant premium to the value of the UK assets on its books, and included 28 facilities and four shredders.
This would leave Sims with metals interests in Australia, New Zealand and North America, where it said demand for scrap metal was stronger.
“By focusing on high-potential markets such as the UA, Australia and New Zealand, where our business position and demand for scrap are stronger, we can effectively leverage our strengths and drive sustainable growth,” continued Mikkelsen.
He said the company would also sell its remaining interest in CLP Circular Services Holdings, formerly called Sims Municipal Recycling of New York, for $32m (£25m).
“We believe that divesting UK Metals and Circular Services unlocks significant value for shareholders, which is not reflected in the current share price.”
Proceeds from the sales would initially be used to strengthen Sims’ balance sheet.