Industrial concern Norsk Hydro is on the verge of becoming one of the world's largest aluminum producers. It struck a deal Monday to take over VAW aluminium AG of Germany, for a whopping NOK 21 billion.
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The deal ranks as the largest international acquisition in Norway's history. Hydro will acquire all shares of the German aluminum company and assume its debt.
The seller is Germany utility E.ON AG, which confirmed Monday that it would sell its VAW unit to Hydro for EUR 3.1 billion (USD 2.78 billion).
The deal is subject to clearance by the European Union competition authorities and approval from Hydro's corporate assembly. It's expected to close during the first quarter.
Hydro chief executive Eivind Reiten said the acquisition marked "a great day for Norway," calling it "an important step towards realizing one of Hydro's key strategic ambitions of becoming on eof the top-performing world class aluminum companies."
Reiten said Hydro considered the acquisition "attractively priced" and a potential boon to earnings.
Hydro said, however, that the planned takeover would result in 1,100 job cuts, including 300 in Norway. Hydro's light metals division, which may in turn be a candidate for stocklisting on its own, will have 30,000 employees after the VAW takeover with annual revenues of some NOK 80 billion.
VAW now has about 16,000 employees.