Emirates Global Aluminium (EGA) signed a binding sale and purchase agreement for the acquisition of Leichtmetall Aluminium Giesserei Hannover GmbH, a German aluminum recycling firm. EGA will acquire 100% percent of the recycling operation from Leichtmetall Holding GmbH, a subsidiary of an investment fund managed by Quantum Capital Partners GmbH. This is EGA’s first major acquisition since the company was formed through the merger of Dubai Aluminium and Emirates Aluminium a decade ago.
“This acquisition provides EGA a platform to develop a recycling business close to our customers in Europe, contributing to the emerging circular economy and building on our existing position as one of the biggest importers of primary aluminum on that continent,” said Abdulnasser Bin Kalban, chief executive officer of EGA. “Leichtmetall will grow as part of EGA. The acquisition of Leichtmetall adds significant value to EGA and, alongside the recycling facility we are building in Abu Dhabi, is just the first step for EGA in capturing growth opportunities worldwide in low carbon primary and recycled aluminum, expanding our business and enabling us to reach net zero greenhouse gas emissions by 2050.”
Leichtmetall is a specialty foundry in Hannover, Germany, that uses renewable energy to produce up to 30,000 tonnes per year of aluminum billets comprised of 80% secondary aluminum input material. The company implements a proprietary inductive melting technology, liquid metal treatment, and casting process developed over more than four decades to recycle scrap metal into high quality and specification products used in demanding applications.
Its production mainly consists of hard alloy billets up to 1,150 mm in diameter for various applications, including manufacturing high load bearing extruded profiles and very large forged components. Leichtmetall has customers across Europe — particularly in Germany, Italy, and France.
“Becoming part of EGA, the largest ‘premium aluminum’ producer in the world, will unlock additional capital and resources for Leichtmetall to grow our business further, continue developing our technology, and strengthen our ability to partner with international customers in Europe and beyond,” said Thomas Witte, chief executive officer of Leichtmetall. “This transaction is great news for our existing customers and will help us secure new opportunities, while playing a key role in the growth of EGA’s wider recycling business.”
Market analysts expect global demand for recycled aluminum to grow from some 27 million tonnes per year in 2022 to 57 million tonnes in 2040. In particular, recycled aluminum is expected to account for around 60% of the growth in global aluminum supply between now and 2030, and around 70% of supply growth between 2030 and 2040.
EGA currently exports over 600,000 tonnes of primary aluminum to Europe each year, making it a significant supplier for the European automotive and construction industries. In order to better serve the European market, the company has been investing in recycling capacity. This includes both the construction of the UAE’s largest aluminum recycling plant in Al Taweelah and the purchase of the Leichtmetall plant in Germany.
“The acquisition of Leichtmetall greatly enhances our ability to meet European high-end aluminum demand, operationally and commercially, as well as contributing to our carbon emissions reduction aspirations,” said Adel Abubakar, chief marketing officer of EGA. “Leichtmetall and the 170,000 tonnes per year aluminum recycling facility we are building in the UAE are together a strong combination, which will be part of shaping the future EGA, enabling us to support our global customers in meeting their future carbon intensity and properties requirements for their metal.”
The purchase of Leichtmetall is expected to close during the first half of 2024, subject to obtaining regulatory approvals.