Norsk Hydro sells its Rolling division
The financial investor KPS Capital Partners plans to acquire the Rolling division of Norsk Hydro. With the transaction, the Norwegian aluminium group aims to improve its profitability.
The transaction includes a total of seven plants, a research and development centre, the global sales offices and about 5,000 employees, of which about 650 are in Norway, the others mainly in Germany.
Purchase price: 1.38 billion euros
The new owner will be the American investment fund KPS Capital Partners. The company manages a number of investment funds with assets of over 12.3 billion US dollars (as of 31 December 2020). KPS invests mainly in manufacturing and industrial companies.
The Rolling division was valued at 1.38 billion euros. 435 million euros will be received directly by Norsk Hydro, while 856 million euros will go towards reducing pension obligations.
In 2019, Norsk Hydro started a strategic review of the Rolling business area. "We have now completed this and our rolling business will continue its development under new ownership," says Hydro President and CEO Hilde Merete Aasheim.
In an interview with the Reuters news agency, Hilde Merete Aasheim pointed out that the Rolling division had only generated a return of 3.3 per cent on capital employed since 2015 - that was "too little". The group-wide target is ten per cent. Hydro is striving to increase profitability and promote wSustainability, he said. "The sale of Rolling will strengthen our ability to execute our strategy; strengthening our position in low carbon aluminium, while at the same time unlocking new growth in areas where our capabilities fit global megatrends," Aasheim said.