The U.S. Bankruptcy Court has approved the Swedish company Gränges’ acquisition of Noranda Aluminum’s downstream aluminum rolling business in the United States. To assist in the acquisition, Gränges worked with the financial firms Danske Bank and Svenska Handelsbanken.
June 14, 2016, Gränges announced that it had reached an agreement with Noranda to acquire its downstream aluminum rolling business in the United States as part of a Chapter 11 reorganization of Noranda. Gränges emerged as the winner of a subsequent auction valuing the business and its related assets at $324.2 million. Aug. 17, 2016, Gränges received final approval as a buyer by the U.S. Bankruptcy Court.
According to Gränges, the acquisition of Noranda’s aluminum rolling business will double its sales volume and strengthen its position in North America. Further, Gränges says it will add a number of strategic and attractive market segments in rolled aluminum. The new assets have a combined production capacity of 180,000 metric tons per year.
“This is a strategically important transaction for us, meaning a new chapter in the history of Gränges is written," says Gränges CEO Johan Menckel in a news release. "Together, we become a global player in our chosen key areas and significantly strengthen our market offering. At the same time, we acquire the platform we have been seeking to expand Gränges in North America. Through this transaction we now see large opportunities to further build our business and market share in the coming years.
“We are satisfied to have the opportunity to execute this transaction at an attractive valuation. We will remain financially strong after the transaction, as we expect our gearing to be in line with our long-term financial targets already in 2018. We believe this is a transaction that will benefit our employees as well as our customers and shareholders,” Menckel continues.
Noranda’s downstream aluminum rolling business manufactures products for air conditioners, transformers, food packaging and other adjacent market segments.
The company’s rolling mills are in Huntingdon, Tennessee, and in Salisbury, North Carolina. The Tennessee mill accounts for about 80 percent of the business.
Additionally, the Noranda acquisition includes a surface treatment plant in Newport, Arkansas.
Gränges adds that the acquisition provides several additional strategic advantages: a complete production chain with no anticipated immediate major investment needs; an experienced organization with longstanding customer relationships and several years of stable profitability; and geographic proximity to a majority of customers.