Transactional highlights

• Binding offer to acquire Rio Tinto’s Icelandic aluminum plant Rio Tinto Iceland Ltd (“ISAL”), its 53% share in Dutch anode facility Aluminum & Chemie Rotterdam B.V. (“Aluchemie”), and 50% of the shares in Swedish aluminum fluoride plant Alufluor AB (“Alufluor”) for USD 345 million, subject to post-closing adjustments.
• In accordance with French and Dutch law, Hydro’s offer triggers a statutory consultation with Rio Tinto employees and other stakeholders. Given successful consultations, and approval from the EU competition authorities, the transaction is expected to be finalized in the second quarter of 2018, making ISAL, Aluchemie and Alufluor part of Hydro’s global operations.

Strategic rationale

• Reinforces leading European position: ISAL produces 210,000 mt liquid metal and a total of 230,000 mt extrusion ingot for the European building, construction and transportation segments from its newly built casthouse with full ultrasonic testing capabilities. This will further strengthen Hydro’s position as the preferred and leading extrusion ingot supplier in Europe.            

• Renewable Energy: Hydro is one of the world’s leading aluminum producer based on renewable energy. With ISAL’s 210,000 mt of aluminum based on renewable power, Hydro increases its total capacity in primary aluminum production to 2.4 million mt in 2018 and its share of production that is based on renewable energy to over 70 percent.

• Integrated value chain: The transaction reinforces Hydro’s strategic direction of being a fully integrated aluminum company, with a solid asset base, portfolio flexibility and sustainable global operations.

“The offer demonstrates our strong belief in aluminum, which is seeing the strongest global demand growth among base metals. Having presence across the value chain is essential to create value from this growth and promote sustainable practices in our global operations,” says Hydro President and CEO Svein Richard Brandtzæg.

Hydro sees synergies with respect to technology creep, optimization of anode portfolio and freight and handling. The Icelandic plant runs on the same technology platform as Hydro’s Husnes plant in Norway, where Hydro recently announced a re-opening and technological upgrade of the plants’ second electrolysis line.

“We see great potential in exchanging competence and technology elements between our aluminum plants. We are now running a technology pilot in Norway which aims to be the world’s most energy-efficient and climate friendly aluminum production facility. These innovations will be expanded to other Hydro facilities, and as part of Hydro, ISAL will benefit from such technological spin-offs and competence,” says Hilde Merete Aasheim, Head of Hydro’s Primary Metal business area.