Category: Chemicals / Metals
Norwegian metals firm Norsk Hydro has agreed to take full ownership of aluminum products maker Sapa by buying a 50 percent stake from conglomerate Orkla, the companies said on Monday.
The transaction values Sapa at 27 billion Norwegian crowns ($3.24 billion) on a debt-free basis.
Hydro predicted it would see annual synergies of 200 million crowns, and that the deal would immediately be accretive to earnings and secure strong cash generation.
“The combination will make Hydro the only global company in the aluminium industry that is fully integrated across the value chain and markets,” it added in a statement.
Jointly owned by Orkla and Hydro since 2013, Sapa has 22,400 employees and in 2016 recorded sales of 53 billion crowns. Orkla had previously said it would eventually sell its stake, either directly to Hydro or through an initial public offering.
“For Orkla, the sale is a natural consequence of our strategy of becoming a focused branded consumer goods company,” Orkla Chief Executive Peter Ruzicka said in a statement.
Completion of the transaction is subject to approval from competition authorities, and is expected in the second half of 2017, Hydro and Orkla said.
“The transaction will be financed through cash positions and issuance of bonds in Norwegian and international markets,” Hydro added.
Orkla separately said it would pay a special dividend of 5 Norwegian crowns per share when the deal closes.
The firm has shed several large businesses in recent years, including breweries and chemicals making, but will continue to build up its remaining operations through acquisitions and investments.