Hydro plans to acquire all the shares of the recycling company Alumetal SA in Kęty for €232m.
With the transaction, Hydro will strengthen its recycling position in Europe and widen its product offering in the low-carbon and scrap-based foundry alloy market. The Norwegian aluminium group aims to double scrap recycling and to increase annual recycling Ebitda by a range of NOK0.7-1.1bn by 2025.
Alumetal is the second largest producer of casting aluminium alloys in Europe with a production capacity of 275,000 tpy with three plants in Poland and one in Hungary. The company sells its products primarily within Europe and to the automotive sector, which represents the largest customer group. Alumetal is also experienced in PCS sorting and is currently constructing a new sorting line.
The company is listed on the Warsaw Stock Exchange. Completion of Hydro’s tender offer is subject to customary terms and conditions, including obtaining competition clearance and gaining control of a minimum of 66 % of total shares outstanding. Hydro has concluded an agreement with two members of the Alumetal Supervisory Board and all members of the management board, in total holding 39 % of the company’s shares, who have undertaken to submit subscriptions in the tender offer for all their shares at the offer price.
Acquisition strengthens Hydro’s recycling position in Europe
Following the acquisition of Alumetal, Hydro will increase the post-consumer scrap (PCS) usage by 150,000 tpy, which together with recently announced recycling projects will enable Hydro to meet its ambition to double PCS usage by 2025. The acquisition will provide an annual Ebitda uplift of €47m based on Alumetal’s 2021 financials. The offer price represents a 4.7 % premium over the closing price of the day prior to the announcement.
The subscription period for the tender offer is expected to commence on 13 June and expire on 12 July 2022. Hydro reserves the right to extend the subscription period in accordance with the terms and conditions of the tender offer. The management board of the target is expected to issue an opinion prior to the commencement of the subscription period.
Hydro: “We have been impressed by the development of the company over time”
“An acquisition of Alumetal is an exciting step towards delivering on our recycling strategy. We have been impressed by the development of the company over time, and by the quality of production, modern assets and of the competence of management and employees. We look forward to bring Alumetal into the Hydro family and join forces to develop an even better offering of low-carbon recycled aluminium to our customers in the years to come,” says Eivind Kallevik, executive VP of Hydro Aluminium Metal.
Hydro breaks ground for recycling plant in the US
Only recently, Hydro has broken ground for the construction of a new aluminium recycling plant in Cassopolis, Michigan. Production will commence in 2023. When ramped up to full production, the plant will produce 120,000 tpy of recycled extrusion ingot.
The Cassopolis greenfield development will mark the first large-scale production of Hydro’s low-carbon Circal extrusion ingot in North America. This product contains at least 75% post-consumer scrap and has a market-leading CO2 footprint of just 2.3 kg CO2e per kg aluminium. With a growing focus on sustainably produced aluminium, a number of North American customers have expressed interest in this product, says Hydro.