Transactional highlights:
- Binding agreement to acquire Orkla’s 50% interest in Sapa
- Sapa enterprise value NOK 27 billion
- Accretive to earnings and strong cash generation from Sapa from day 1
- Synergies of NOK 200 million per year, mainly related to remelt and recycling
- Sapa to become new business area in Hydro, named Extruded Solutions
- Anticipated closing of the transaction in second half 2017
- Strong strategic rationale
- Global leadership: worldwide production and customer offering, with unparalleled technological capability
- Growth: capability and freedom to grow in the most attractive areas of global aluminium
- Infinite solutions: responsible operations and sustainable solutions for the future low-carbon economy
Transaction
The transaction will be financed through cash positions and issuance of bonds in Norwegian and international markets, and will be temporarily funded by committed undrawn credit lines.
Following the transaction, Hydro is committed to retain its investment grade rating and a robust balance sheet. Hydro will maintain its dividend policy of returning 40 percent of net income over the cycle, with NOK 1.25 per share seen as a floor in 2017.
The purchase price will be paid in cash at completion, adjusted for net debt and normalized working capital.
Completion of the transaction is subject to approval from relevant competition authorities, and is expected in the second half of 2017.
Union representatives from both companies have been involved in the acquisition process from the very start, making sure the voices of their members are heard.
Completion of the transaction is expected by second half 2017, pending approvals from relevant competition authorities in Brazil, Canada, China, EU and Turkey.
Please check www.hydro.com for more information
