Hydro Buys Out Rio Tinto Alcan’s Stake in Soral Aluminium Plant

Aluminium company Hydro and Rio Tinto Alcan (RTA) have signed an agreement for Hydro to take over RTA's share of the aluminium smelter Sør-Norge Aluminium AS (Søral) in Norway. Following the closing of the agreement, the plant will become Hydro's fifth fully owned aluminium smelter in Norway.

Søral is a primary aluminium plant situated in Husnes at the Norwegian west coast, with an annual production capacity of about 180,000 metric tons primary aluminium. The plant, which has been operated as a standalone unit, idled one of its two production lines in 2009, and is currently producing around 90,000 tons annually. Søral has 230 employees, and has prior to the agreement been owned by Rio Tinto Alcan (50 percent) and Hydro (49.9 percent).

"We believe in the Norwegian aluminium industry. Søral is a well invested plant, which on a comparable basis has a cost position in line with the rest of our Norwegian smelters. A change in ownership makes it possible to contribute even stronger in strengthening operations," says Executive vice president and head of Primary Metal, Hilde Merete Aasheim.

Søral's financial situation will be improved through short term relief in costs. With these, and certain system effects of the Hydro ownership, the company sees a more robust financial situation for the plant going forward.
"Hydro already has a strong primary aluminium production base in Norway and we believe Søral will be a valuable contribution to our portfolio. The plant fits well into Hydro's high premium cast house product strategy," says Aasheim.

Acknowledging the excellent historical collaboration between Hydro and RTA, Arnaud Soirat, President and chief executive officer of the Primary Metal division in RTA extends his gratitude towards the employees of Søral.

"Rio Tinto Alcan wishes to take this opportunity to thank all Søral employees for their valued contribution over the years," he says.

Closing of the transaction is pending, including approval from relevant competition authorities in Norway and France, and is expected in second half of 2014. Until closing of the agreement, Søral will still be governed by the current board of directors. The terms of the agreement are confidential.

Source: http://www.hydro.com

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