Norsk Hydro ASA and Orkla ASA are combining their profiles, building systems and tubing business to create a world leader in aluminium solutions called Sapa. This joint venture will be 50/50 owned by the two companies. It consists of the current offering of Orkla’s fully-owned Sapa and Hydro’s Extruded Products business area. Orkla will also be compensated 1.8 billion to account for size difference of the units. The combined entity had a turnover of around 47 billion NOK, underlying EBITDA of 1.9 billion and some 25 000 employees based on 2011 figures.
The combination requires approval from competition authorities; new company will be a market leader in Europe and North America in addition to its presence in emerging markets. Completion of the transaction is expected in H1 2013. The parties feel that the new company will be better positioned to restructure the business and expects 1 billion NOK in annual synergies.
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