By Dominic Chopping
STOCKHOLM--Norwegian aluminum producer Norsk Hydro ASA (NHY.OS)
and consumer goods conglomerate Orkla ASA (ORK.OS) said Monday they
have agreed to join their profiles, building systems and tubing
businesses as they react to toughening conditions and prepare for
future emerging market growth.
The equal joint venture will be called Sapa. Based on 2011
numbers, it would have 47 billion kroner ($8.21 billion) in annual
revenue and is expected to yield annual synergies of around NOK1
billion.
"The new company will have the necessary strength to meet
current challenging markets and create a platform for future growth
in emerging markets," Norsk Hydro Chief Executive Svein Richard
Brandtzaeg said.
To compensate for the difference in size and to harmonize
certain balance sheet items, Orkla will receive NOK1.8 billion from
the new company in addition to its 50% ownership.
Completion of the transaction is expected to take place in the
first half of 2013, and either party can initiate an initial public
offering of the new company after three years from closing, with
each party able to retain a 34% holding.
Write to Dominic Chopping at dominic.chopping@dowjones.com
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