Swedish aluminium firm Gränges AB announced last week that their acquisition of Noranda’s North American business had been completed. Gränges acquired the firm during bankruptcy proceedings held at the U.S. Bankruptcy Court in St. Louis, Missouri.
The bankruptcy court approved the acquisition earlier this month, paving the way for Gränges to acquire Noranda’s US$330 million in assets. After the acquisition Gränges will have doubled its sales volume, expecting a new sales total of 336 thousand metric tons per annum, with almost sixty percent of those sales being made in the Western Hemisphere. Net sales under such a sales volume is in the neighborhood of US$1.2 billion. The assets in question are now part of Gränges America, Inc., a wholly-owned subsidiary of Gränges AB.
“This is a strategically important transaction for us, meaning a new chapter in the history of Gränges is written. 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,” says Johan Menckel, Gränges’ CEO.
“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,” he continued.
Danske Bank and Svenska Handelsbanken provided Gränges with a credit facility in order to facilitate the purchase. Gränges is financing the purchase with a five-year note worth US$300 million. The firm also refinanced a revolving credit facility, converting it to a three-year, multi-currency revolving credit facility of US$141 million.