Norway-based Norsk Hydro has announced a tender offer for the acquisition of 100 percent of the shares of Poland-based Alumetal S.A. Hydro describes that company as the second-largest producer of aluminum casting alloys in Europe.
According to Hydro, Alumetal has annual production capacity of 275,000 metric tons at its three plants in Poland and one in Hungary. Hydro describes the company as experienced in the sorting of postconsumer scrap and says Alumetal currently is “constructing a new, state-of-the-art sorting line” for the scrap it melts. Alumetal sells its products primarily within Europe and to the automotive sector, Hydro adds.
“An acquisition of Alumetal is an exciting step toward delivering on our recycling strategy,” says Eivind Kallevik, an executive vice president with Hydro. “We have been impressed by the development of the company over time, and by the quality of production, modern assets and of the competence of management and employees. We look forward to bringing Alumetal into the Hydro family and join forces to develop an even better offering of low-carbon recycled aluminum to our customers in the years to come.”
Hydro will pay an estimated $305 million for Alumetal. “With the transaction, Hydro will strengthen its recycling position in Europe and widen its product offering in the low-carbon and scrap-based foundry alloy market,” states the Norwegian company.
Completion of the purchase is subject to terms and conditions, including obtaining anti-trust-related clearance and “gaining control of a minimum of 66 percent of total shares outstanding,” Hydro says. The company says it “has concluded an agreement with two members of the Alumetal Supervisory Board and all members of the Alumetal Management Board, in total holding approximately 39 percent of the company’s shares, who have undertaken to submit subscriptions in the tender offer for all their shares at the offer price.”Hydro says its 2025 strategy has been designed to strengthen its position in low-carbon aluminum by investing in recycling. Hydro has set a 2025 strategic ambition to double its recycling of what it calls post-consumer scrap and to increase annual recycling earnings by a range of about $75 million to $117 million by 2025. The use of post-consumer scrap “significantly reduces the CO2 footprint” compared to pre-consumer or process scrap or primary aluminum, states the firm.