“Sapa has successfully restructured its business and lifted profitability and is now well-positioned to continue its journey as part of Hydro, aiming for even higher value creation through targeting high-tech, high-competence value-add market segments,” Brandtzæg said.
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% of net income over the cycle, with NOK1.25 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.
The combination will make Hydro the only global company in the aluminium industry that is fully integrated across the value chain and markets. Hydro’s rolled products business has a strong market presence throughout product segments in Europe. Sapa is the global extrusion champion, with strong market shares in North America and Europe, and is the global leader in precision tubing. Hydro also has solid market presence in metal products across the value-added metal product categories in Europe, North America and Asia, and is Norway’s second-largest producer of renewable hydropower. With long positions in bauxite and alumina, Hydro is among the global leaders in the third-party bauxite and alumina market outside China.