Orkla ASA and Alcoa plan to combine soft alloy extrusion businesses
Nordic Business Report-November 22, 2006-Orkla ASA and Alcoa plan to combine soft alloy extrusion businesses
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Norwegian multi-sector group Orkla ASA said on Tuesday night (21 November) that it has signed a letter of intent regarding a joint soft alloy extrusion business with the US aluminium group Alcoa (NYSE: AA).
Orkla and Alcoa plan to combine their existing soft alloy extrusion operations into a new company which would initially be majority-owned by Orkla. There are also plans for a subsequent initial public offering and listing of the new company.
The new company would comprise the extrusion business of Orklas subsidiary Sapa Group with 6,000 employees at 18 facilities in 12 countries, and with revenues of USD1.3bn, and Alcoas soft alloy extrusion business with 6,400 employees at 22 facilities in eight countries, and with revenues of USD2.1bn.
"The joint venture will become a global leader in the aluminium extrusion business, with an estimated annual turnover of USD4bn in 2006. We will forcefully embark on capturing the opportunities of the combined entity and lay the foundation for further expansion," said Ole Enger, Chairman of Sapa and head of Orklas Speciality Materials business.
Orkla, headquartered in Oslo, Norway, operates within branded consumer goods, speciality materials and financial investment. It has 27,000 employees in over 70 countries, and reported revenues of USD8.4bn in 2005. Orkla is listed on the Oslo Stock Exchange and traded under the ticker code ORK.
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