Norwegian aluminum producer Norsk Hydro ASA (NHY.OS) will take full ownership of aluminum products joint venture Sapa after reaching a deal to buy the 50% of the company it doesn't already own from partner Orkla ASA (ORK.OS), it said Monday.
The deal values Sapa at 27 billion Norwegian kroner ($3.2 billion) and is in line with Hydro's strategy of becoming an integrated aluminium company involved in everything from mining to end-user products.
"The combination will make Hydro the only global company in the aluminum industry that is fully integrated across the value chain and markets," it said in a statement.
Synergies are seen at NOK200 million a year and the deal will be accretive to earnings with strong cash generation immediately, according to Hydro.
Sapa was formed in 2013 as a joint venture between Orkla and Hydro, as the companies pooled some of their assets to create a platform for growth in emerging markets. It has 22,400 employees and is present in 40 countries.
The purchase price will be paid in cash at completion of the deal and financed through cash positions and issuance of bonds, Hydro said.
Completion is subject to approval from competition authorities and is expected in 2017.
-Write to Dominic Chopping at firstname.lastname@example.org; Twitter: @domchopping @WSJNordics
(END) Dow Jones Newswires
July 10, 2017 02:40 ET (06:40 GMT)