Dec 10 2006
Hydro has agreed to sell its 49-percent share in the Canadian company Meridian Technologies Inc. to a consortium led by the Norwegian entrepreneur Jostein Eikeland's Swiss holding company Estatia AG. The sale marks another step in the ongoing restructuring of Hydro's downstream aluminium portfolio.
Hydro is in the process of divesting its Automotive Components activities. Last month, Hydro announced an agreement to divest its large Automotive Castings business and the company is preparing to divest Automotive Structures.
Earlier this year, Hydro also announced that it would exit the magnesium business through the closure of its magnesium plant in Canada and sales of two other plants.
Meridian Technologies, which is headquartered in Strathroy, Ontario, is the world’s largest supplier of die-cast magnesium components to the automotive industry. The company employs approximately 1,350 people and has six production facilities in five countries and is the only magnesium die caster with global manufacturing, engineering and business development operations.
In addition to acquiring Hydro’s interest, the Estatia-led consortium will purchase the 51-percent interest of Meridian’s majority owner Teksid S.p.A., thereby taking over full ownership of Meridian. Teksid is a Fiat group company.
The transaction is based on an enterprise value of the business of CAD 200 million (NOK 1,1 billion). At closing the transaction will not have any significant impact on Hydro’s results.
The transaction is subject to regulatory approval by Canadian authorities.