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The transaction implies an Enterprise Value of approximately PLN 1.332 billion (approximately EUR 290 million) based on latest reported net debt as of FY2021 and dividends payable of PLN 106 million (approximately EUR 23 million) dividend payment date on July 27, 2022. With the transaction, Hydro will strengthen its recycling position in Europe and widen its product offering in the low-carbon and scrap-based foundry alloy market.

Completion of the tender offer is subject to customary terms and conditions, including obtaining competition clearance and gaining control of a minimum of 66% of total shares outstanding. Hydro has concluded an agreement with two members of the Alumetal Supervisory Board and all members of the Alumetal Management Board, in total holding approximately 39% of the company’s shares, who have undertaken to submit subscriptions in the tender offer for all their shares at the offer price.

Hydro’s 2025 strategy aims to strengthen Hydro’s position in low-carbon aluminium by investing in recycling. Hydro has set a 2025 strategic ambition to double its recycling of post-consumer scrap (PCS) and to increase annual recycling EBITDA by a range of NOK 0.7 to 1.1 billion by 2025. The use of PCS significantly reduces the CO2 footprint compared to pre-consumer/process scrap as well as primary aluminium.

The transaction announced today is an important step in delivering on the 2025 strategic agenda. Following the acquisition of Alumetal, Hydro will increase the PCS usage of approximately ~150 ktpy, which together with recently announced recycling projects, will enable Hydro to meet its ambition to double PCS usage by 2025. The acquisition will provide an annual EBITDA uplift of EUR 47 million based on Alumetal’s 2021 financials.

The offer price represents a 4.7% premium over the closing price of the day prior to the announcement.

The subscription period for the tender offer is expected to commence on June 13, 2022 and expire on July 12, 2022. Hydro reserves the right to extend the subscription period in accordance with the terms and conditions of the Tender Offer. The Management Board of the target is expected to issue an opinion prior to the commencement of the subscription period.

Alumetal is the second largest producer of casting aluminium alloys in Europe with a production capacity of 275,000 tonnes per year with three plants in Poland and one in Hungary. The company sells its products primarily within Europe and to the automotive sector, which represents the largest customer group. Alumetal is also experienced in the sorting of post-consumer scrap (PCS) and is currently constructing a new, state-of-the-art sorting line.

“An acquisition of Alumetal is an exciting step towards delivering on our recycling strategy. We have been impressed by the development of the company over time, and by the quality of production, modern assets and of the competence of management and employees. We look forward to bring Alumetal into the Hydro family and join forces to develop an even better offering of low-carbon recycled aluminium to our customers in the years to come,” says Eivind Kallevik, Executive Vice President of Hydro Aluminium Metal.

Cautionary note

This announcement is for informational purposes only and cannot be treated as an offer or proposal to purchase shares, nor as a recommendation regarding investment decisions in relation to the tender offer for the sale of shares in Alumetal S.A., announced on April 29, 2022 by Hydro Aluminium AS (the "Tender Offer") through Bank Pekao - Biuro Maklerskie Pekao and Pekao Investment Banking S.A. as intermediary broker. The Tender Offer document (as published or amended thereafter) is the only legally binding source of information on the terms of the Tender Offer and is the only legally binding document relating to the Tender Offer process. At the same time, the Tender Offer should not be considered as a recommendation or forecast from Hydro Aluminium AS, any Hydro group entitiy or Bank Pekao S.A., Pekao Investment Banking S.A. and entities from Bank Pekao S.A.'s capital group.

The information is such that Hydro is required to disclose in accordance with the EU Market Abuse Regulation. The information was submitted for publication from Hydro Investor Relations and the contact persons set out above.

This information is subject to the disclosure requirements pursuant to Section 5-12 the Norwegian Securities Trading Act.


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