Norwegian aluminium producer Norsk Hydro ASA said yesterday it sold its aluminium rolling business to KPS Capital Partners for €1,380 million as part of the firm’s effort to shore up profitability and encourage sustainability.
Hydro’s rolling business includes seven plants, a research and development center, global sales offices, and approximately 5,000 employees. The majority of the rolling business’s workforce is in Germany, while 650 work in Norway.
Hydro President and CEO Hilde Merete Aasheim elaborated on the firm’s rationale in a related press release.
“Hydro launched a strategic review of our Rolling business area in 2019, along with other strategic measures towards profitability and sustainability. We have now concluded, and our Rolling business will continue its development under new ownership. This is a good solution for both Hydro and for the employees in Rolling, who will continue their efforts and continued growth in a new, dedicated downstream company.”
“Hydro’s ambition is to lift profitability and drive sustainability, creating value for all stakeholders. The sale of Rolling will strengthen our ability to deliver on our strategy, strengthening our position in low-carbon aluminium, while exploring new growth in areas where our capabilities match global megatrends,” she continued.
Hydro’s rolling business generated around NOK24 billion in revenue and NOK1.3 billion in underlying EBITDA last year. The 864 thousand metric ton per annum operation produces Can, Foil, Lithography, Automotive, and General Engineering products.
Michael Psaros, Co-Founder and Co-Managing Partner of KPS Capital Partners, expressed excitement about the purchase.
“KPS is enthusiastic about the opportunity to further develop Rolling to its full potential, including providing the resources necessary to execute a business transformation. We have spent three months closely analyzing the business in the customary detailed due diligence, have been highly impressed with the Rolling management team, and look forward to partnering with them and the entire Rolling team to invest in and grow the business.”
Assuming the usual regulatory approvals are obtained, the deal is expected to close in the latter half of the year.
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.