Orkla and Hydro to form new company

Norsk Hydro and Orkla have agreed to combine their respective profiles, building systems and tubing business, creating the world’s leading aluminium solutions provider.

The new combined company, to be named Sapa, will be a 50/50 joint venture owned by Orkla and Hydro.

The agreement covers Profiles and Building System, as well as Extruded and Welded tubes, of Orkla’s fully-owned Sapa and all of Hydro’s Extruded Products business area.

Based on 2011 figures, the combined company will have around NOK 47 billion in annual revenues, underlying EBITDA of around 1.9 billion and approximately 25,000 employees.* The new company will have leading positions in Europe and North America, and strong footholds in emerging markets, including Brazil, Argentina, China, India and Vietnam.

Completion of the transaction is expected to take place in the first half of 2013, following approvals from relevant competition authorities. Svein Tore Holsether, currently President and CEO of Sapa, will be President and CEO, and Arnstein Sletmoe, currently Head of Mergers & Acquisitions in Hydro, will be appointed CFO of the merged company. President and CEO of Hydro, Svein Richard Brandtzæg, will be the chairman of the company. Sapa will have its headquarter in Oslo, Norway.

”Together we are creating a stronger company with a broader competence base and a highly experienced management team. In today’s very challenging market conditions, the combined company will be better positioned for restructuring and value creation. This will strengthen Orkla’s ability to successfully capture the value potential of our aluminium business,” says Orkla’s President and CEO Åge Korsvold.

"Aluminium is the material of the future. To meet customers' high demands, we need to continue to excel in R&D, deliver with precision and optimize our global footprint. Both entities have demonstrated their ability to increase quality and efficiency, and together we are determined to bring out the best of the two companies into one," says Svein Tore Holsether, President and CEO of Sapa.

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