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Norway's Hydro in $3.2 billion deal for aluminum firm Sapa

Staff Writer |
Norwegian metals firm Norsk Hydro will take full ownership of aluminum products maker Sapa by buying a 50 percent stake from conglomerate Orkla.

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The transaction values Sapa at 27 billion Norwegian crowns ($3.24 billion) on a debt-free basis.

"Sapa will enable us to assume global leadership, establish a platform for growth, and provide responsible operations and sustainable solutions for the future low-carbon economy," Hydro Chief Executive Svein Richard Brandtzaeg said.

While Hydro itself produces primary aluminum from scratch, Sapa cuts, presses and shapes the metal, making it a key supplier to aircraft makers, automotive firms and the construction industry.

"The combination will make Hydro the only global company in the aluminum industry that is fully integrated across the value chain and markets," Hydro said.

Hydro predicted it would see annual synergies of 200 million crowns, and that the deal would immediately be accretive to earnings and secure strong cash generation.

Jointly owned by Orkla and Hydro since 2013, Sapa has 22,400 employees and in 2016 recorded sales of 53 billion crowns.

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