Norway-based aluminum and energy producer Hydro has agreed with conglomerate Orkla ASA, also based in Norway, to acquire Orkla’s 50 percent interest in aluminum extrusion firm Sapa Group. Hydro says it will pay $3.26 billion to acquire full ownership of Sapa, which it describes as “the global leader in extruded aluminum solutions.”
On its website, Sapa says it has 22,800 employees globally in more than 40 countries. About 6,200 of those employees are in the United States at some 20 extruding facilities and eight casting plants that melt considerable amounts of aluminum scrap.
“Hydro is now confirming its position as the world’s leading integrated aluminum company and the transaction reinforces our strategic direction ‘Better, Bigger and Greener,’ with a solid asset base, unique competencies and capabilities from mining to end user products,” says Svein Richard Brandtzæg,
Hydro says the buyout will make it “the only global company in the aluminum industry that is fully integrated across the value chain and markets.” After Hydro and Orkla combined their aluminum extrusion assets to form Sapa Group in 2013, the two companies “have consistently supported the Sapa joint venture’s impressive progress toward [by] streamlining and improving its global operations,” says Hydro.
Following the transaction, Hydro says it will have more than 35,000 employees and will be active in about 40 countries. Hydro’s rolled products business has a major market presence in Europe while Sapa has
“Sapa has successfully restructured its business and lifted profitability, and is now well-positioned to continue its journey as part of Hydro, aiming for even higher value creation through targeting high-tech, high-competence value-add market segments,” says Brandtzæg.
Completion of the transaction is subject to approval from relevant regulatory authorities and is expected in the second half of 2017, according to Hydro.
Hydro says there are retention agreements in place for Sapa’s management team, and that Orkla and Hydro have agreed to share the retention costs.