Hydro Aluminium was formed on 1 September 1986 through the integration of Årdal og Sunndal Verk (ÅSV) and Hydros aluminium division. A new aluminium company was born with a clear international profile and a strong production base in Norway.
The merger aimed to both secure a future in semi-manufactured products and to ensure the supply of raw materials. Five years later Hydro Aluminium was able to supply 500,000 tonnes of aluminium oxide per year, three quarters of which went on to be processed in its own plants.
During these five years, activities increased by 50 per cent, and the operation became the fifth largest aluminium company in the world.
In the same period, Hydro also acquired five extrusion plants from Alcan in Central Europe, expanded metal production at Karmøy, purchased the oxide plant Alpart in Jamaica, and took over the building system company Wicona in Germany.
With the purchase of the German company VAW around ten years later, Hydro Aluminium became the third largest aluminium company in the world.
Talks finally result in an agreement
The first negotiations on a merger between Hydro and ÅSV took place in 1985, but nothing was agreed. A year later, another round of negotiations culminated in the new aluminium unit Hydro Aluminium on 1 September 1986. Originally 70 per cent owned by Hydro and 30 per cent by the Norwegian state, the company became fully Hydro owned in 1988.
Two people played a key role in the merger: Hydro’s managing director in the 1980s, Torvild Aakvaag, and the managing director of ÅSV, Håkon Sandvold. However, it was a third person, Dag Flaa from Hydro, who became the first top manager in Hydro Aluminium.
No merger is completely problem-free, and neither was the integration of ÅSV and Hydro’s aluminium operation, but it grew into a strong organization which proved to be far more effective as a whole than as a sum of its individual parts.
The two organizations had quite different backgrounds. ÅSV was well up on technology, whereas Hydro had a strong commercial sector. It was hoped that pooling resources would allow the best of both cultures to live on.