Aluminium producer Hydro agrees $1.65 billion sale of Rolling division | Reuters

Norwegian aluminium maker Norsk Hydro has agreed to sell its underperforming Rolling division to private equity firm KPS Capital Partners for 1.38 billion euros ($1.65 billion), Hydro said on Friday. FILE PHOTO: Norwegian aluminium producer Norsk Hydro's CEO Hilde Merete Aasheim poses for a picture in the company's headquarters in Oslo, Norway, May 8, 2019, REUTERS/Terje Solsvik/File Photo

The division, which turns aluminium slabs into metal sheets used for packaging, automobiles and drinks cans among other products, had been under review since Hilde Merete Aasheim became Hydro’s chief executive in May 2019

“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,” Aasheim said on Friday.

The transaction includes seven plants, one research and development centre, global sales offices and about 5,000 employees, 650 of which are in Norway with the remainder mainly in Germany, Hydro said.

“The valuation indicates an impairment of 160 million to 190 million euros, which will be included in the annual financial statements for 2020,” Hydro said in a statement.

Last year Hydro Rolling contributed about 24 billion Norwegian crowns ($2.8 billion) in revenue, 17% of the group total, and 1.3 billion crowns in underlying earnings before interest, tax, depreciation and amortisation (EBITDA), amounting to 9% of the total.

The division’s sales amounted to 864,000 tonnes of aluminium, the company said.

“In addition to delivering on Hydro’s strategic ambitions, the sale will assist in strengthening the balance sheet,” Hydro added.

Hydro last year said it could set up a lithium-ion battery production business in Norway together with Panasonic and Equinor, potentially targeting the European automotive market.

Hydro has a minority share in Norwegian marine batteries business Corvus Energy and battery recycling joint venture Hydro Volt, plus a small stake in Sweden’s Northvolt, which is building factories to make batteries for electric vehicles.

($1 = 0.8364 euros)

($1 = 8.5867 Norwegian crowns) Reporting by Victoria Klesty and Terje Solsvik; Editing by Shri Navaratnam and David Goodman

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