Norsk Hydro To Divest Rolling Business Area To KPS Capital Partners For In EUR 1.38 Bln Deal
Norwegian aluminium and renewable energy company Norsk Hydro ASA (NHY,NHYDY.PK,NHYDY.PK) Friday said it has entered into an agreement to sell its Rolling business to KPS Capital Partners for 1.38 billion euros on an enterprise value basis.
Hydro said the agreed deal price would result in a reduction of 856 million euros in pension liabilities and 435 million euros cash proceeds.
The sale is subject to customary approvals from competition authorities and is expected to be completed during second half of 2021.
The transaction includes seven plants, one R&D center, global sales offices, and around 5,000 employees of which 650 employees in Norway and the remaining mainly in Germany. In 2020, Hydro Rolling contributed around 24 billion Norwegian kroner in revenue, 17% of Hydro total and 1.3 billion kroner in Underlying EBITDA, 9% of Hydro total.
Following the deal, Executive Vice President and Head of Hydro Rolling, Einar Glomnes, will become CEO of the new company after closing.
Hydro said the sale is part of its agenda to improve profitability and drive sustainability. In addition, the sale will assist in strengthening the company’s balance sheet.
The company launched a strategic review of Rolling business area in 2019, along with other strategic measures towards profitability and sustainability.
The Rolling operations will be treated as an asset held for sale and discontinued operations in Hydro’s financial reporting from the first quarter of 2021. The valuation indicates an impairment of 160 million euros to 190 million euros.
Source: Read Full Article