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Norsk Hydro, Sapa agree to merger

July 10, 2017 - Norsk Hydro has agreed with Orkla to acquire its 50 percent interest in Sapa for a total enterprise value of NOK 27 billion (U.S. $3.23 billion), giving full ownership in the global leader in extruded aluminum solutions and making Hydro a leading force in the global aluminum industry.

The two companies have highlighted the value of the transaction. It will be accretive to Norsk Hydro earnings from day one, and generate cash. Synergies should amount to about $23.9 million per year, mainly related to remelt and recycling. Sapa will become a new business area for Norsk Hydro, named Extruded Solutions.

The deal is expected to close during the second half of 2017.

Norsk Hydro cited its reasons for the purchase as being able to create a global aluminum company, with worldwide production capacity and product offerings, bolstered by technological prowess. The merger allows the company the  freedom to grow in the most attractive areas of global aluminum, and contribute responsible operations and sustainable solutions for the future low-carbon economy.

Union representatives from both companies were involved in negotiations from the very start, making sure the voices of their members are heard. The deal requires approvals from antitrust authorities in Brazil, Canada, China, EU and Turkey.

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