Norsk Hydro Tenders Binding Offer for Purchase of ISAL Smelter to Rio Tinto for US$345 MM
27 February 2018 by Staff
Norwegian aluminium firm Norsk Hydro A.S.A. announced yesterday the tender of a binding offer for Rio Tinto Iceland Ltd. (ISAL), a majority share of Dutch anode facility Aluminium & Chemie Rotterdam B.V. (Aluchemie) and a half interest in Swedish aluminium fluoride plant Alufluor AB (Alufluor) to Anglo-Australian mining giant Rio Tinto Group for US$345 million.
According to the firm’s press release, Hydro’s purchase will help meet several goals. With a yearly output of 210 thousand metric tons per annum of liquid metal and 230 thousand metric tons per annum of extrusion ingot, the acquisition of ISAL’s operations will help shore up Hydro’s dominant position as the premier supplier of extrusion ingot on the European continent.
In addition, the acquisition of ISAL adds another 210 thousand metric tons per annum of aluminium capacity produced via renewable energy, bumping Hydro’s total capacity of primary aluminium production to 2.4 million metric tons per annum, with over 70 percent of that output fueled by renewable energy sources.
The move is also a step in the direction of operating as a fully-integrated aluminium company with a solid asset base, a flexible portfolio, and global sustainable operations.
Hydro President and CEO Svein Richard Brandtzæg hailed the move as a ratification of the company’s commitment to aluminium.
“The offer demonstrates our strong belief in aluminium, which is seeing the strongest global demand growth among base metals. Having presence across the value chain is essential to create value from this growth and promote sustainable practices in our global operations.”
Hilde Merete Aasheim, Head of Hydro’s Primary Metal business area, said the acquisition will take advantage of several synergies between the company and the assets in question.
“We see great potential in exchanging competence and technology elements between our aluminium plants. We are now running a technology pilot in Norway which aims to be the world’s most energy-efficient and climate friendly aluminium production facility. These innovations will be expanded to other Hydro facilities, and as part of Hydro, ISAL will benefit from such technological spin-offs and competence.”
The offer is now subject to legally-mandated consultations with Rio Tinto’s employees and other stakeholders. Assuming all regulatory approvals are approved in a timely manner, Hydro expects to close the deal this spring.
Norsk Hydro, which was founded in 1905, financed by the Swedish Wallenberg family and French banks, began its life named Norsk hydro-elektrisk Kvælstofaktieselskab (literally, “Norwegian hydro-electric nitrogen limited”) by Sam Eyde. The Norwegian government owns approximately 40% of the company at the present time. Norsk Hydro is one of the largest aluminium companies in the world, with plants in Rjukan, Raufoss, Vennesla, Karmøy, Høyanger, Årdal, Sunndalsøra, and Holmestrand. Norsk also has several plants abroad, including in Germany and Brazil.