Norsk Hydro signed an agreement with Orkla to acquire its 50% interest in Sapa for a total enterprise value of NOK 27 billion (~US$3.24 billion), giving Hydro full ownership of the global leader in extruded aluminium solutions. The combination will make Hydro the only global company in the aluminium industry that is fully integrated across the value chain and markets. The company believes this will provide it with unparalleled strength in technology, R&D, innovation, and product development, as well as an unmatched product and service offering to the benefit of its more than 30,000 customers throughout the world. Sapa will now be a new business area within Hydro, named Extruded Solutions.
“Hydro is now confirming its position as the world’s leading integrated aluminium 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,” said Svein Richard Brandtzæg, president and CEO of Hydro. “Sapa will enable us to assume global leadership, establish a platform for growth, and provide responsible operations and sustainable solutions for the future low-carbon economy.”
Sapa was established as a 50/50 joint venture in 2013 when Hydro and Orkla merged their existing extrusion operations. All together the company has a history that goes back more than 50 years. Sapa is headquartered in Oslo, Norway, with 22,400 employees at more than 100 plants in 40 countries. It operates within the business areas Extrusion Europe, Extrusion North America, Precision Tubing, and Building Systems.
“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,” said Brandtzæg.
Following the completion of the acquisition, Hydro will become a global, integrated aluminium company with more than 35,000 employees and activities in around 40 countries. The company’s rolled products business has a strong market presence throughout product segments in Europe, while Sapa is the global extrusion leader, with strong market shares in North America and Europe, and is a global leader in precision tubing. Hydro also has solid market presence in metal products across the value-added metal product categories in Europe, North-America, and Asia, and is Norway’s second-largest producer of renewable hydropower. With long positions in bauxite and alumina, Hydro is among the global leaders in the third-party bauxite and alumina market outside China.
Completion of the transaction is subject to approval from relevant competition authorities and is anticipated to close in the second half 2017.