Hydro's aluminum business has developed significantly over the past 25 years, since the ASV merger in 1986, through acquisitions, partnerships and growth. Hydro is today a focused aluminum company with operations throughout the value chain, from bauxite mining to the sale of aluminum products.

Exciting story

An interesting story lies behind the creation of Hydro Aluminum AS in 1986.

YES: Two of the people most influential in the merger process were the companies' top executives: Hydro's Torvild Aakvaag (left) and ASV's Hakon Sandvold. But it was a third person, Dag Flaa from Hydro, who became the first leader of Hydro Aluminum. (Archive photo: Hydro)

In truth, there were not two, but three partners who joined forces in 1986. Just prior to the merger between Ardal og Sunndal Verk (ASV) and Norsk Hydro's Aluminum Division, Hydro acquired five extrusion plants in Europe from Alcan. It was from these various pieces that a new Hydro Aluminum culture was created.

These were companies that completed each other. ASV had extensive knowledge in electrolysis technology. Hydro had a more commercial organization that also invested heavily downstream. The acquisition of the Alcan plants virtually doubled Hydro’s extrusion operation and gave the new company a solid foothold in the European extrusion industry.

Politics and industry

Hydro and ASV had been talking together for a long time – years – before the merger became fact. In 1982, stuck with rock-bottom metal prices, many aluminum producers suffered a crisis year. One was ASV, the Norwegian state-owned company that lost share capital and needed an injection of new money from its owner. Two years later, however, producers experienced a golden year with top prices. The fluctuations were enormous.

At the same time, many in Norway’s political environment were voicing their desire to see the domestic aluminum industry come together in a larger and more powerful unit.

DIFFERENT CULTURES: After the merger, it was important for Dag Flaa and Hydro Aluminum management to create a new company culture with background from several different cultures. It was one of the company's first major tasks. (Archive photo: Hydro)

ASV’s challenge was to secure market access. As a result, its board of directors decided in December 1985 to look into a solution that would achieve a certain level of ownership integration with West Germany’s Vereinigte Aluminum-Werke (VAW). Such a solution would provide ASV with solid footing in the emerging European Federation and create a powerful industrial company in Europe. But the scheme attracted no great enthusiasm in some of the political camps in Norway.

A group of union officials then stepped in, taking the initiative for Norway’s Minister of Industry, demanding a last attempt with Hydro to achieve a Norwegian solution. Hakon Sandvold of ASV and Torvild Aakvaag of Hydro – the top executives of the two companies –had been in contact with each other the whole way. Sandvold also sat on Hydro’s board of directors.

The Industry Minister contacted the companies, and, in early 1986, things started happening fast. When the matter came up in Norway’s Parliament the same spring, there was broad political agreement regarding a merger between ASV and Hydro's Aluminum Division.

The agreement was approved.

Hydro's Aluminum Division was merged debt-free into ASV. This gave Hydro an interest of 70 percent in Hydro Aluminum AS, with the state owning the remaining 30 percent. At the same time, the state owned 51 percent of Hydro.

Later, Hydro used its option to buy the remaining shares from the state, thereby making Hydro Aluminum AS into a wholly owned subsidiary.

Hydro in North America

Hydro’s initial downstream entry into North America came with the construction of its extrusion plant in Rockledge, Florida, which began operations in 1979.  Initially a general extrusion facility, Rockledge today is one of two plants in North America (the other in Reynosa, Mexico which began operations in 2006)  focused on the global heat transfer market as part of Hydro’s Precision Tubing business area.

However, the big downstream steps in North America came with the purchase of Wells Aluminum in 2000 and VAW of America in 2002.  The Wells acquisition brought facilities in Belton, SC, Monett, MO, N. Liberty, IN, Kalamazoo, MI and Sidney, OH – and a US extrusion legacy dating to the early 50’s - under the Hydro banner, while the VAW acquisition added operations in St. Augustine, FL, Phoenix, AZ, and Guaymas, MX.

Today, Hydro’s Extrusion North America unit is among the leaders in the US soft alloy extrusion industry – distinguished by its vertical integration – from billet casting through extruded component manufacture and assembly – its deep fabrication expertise, and its geographic scope.