European aluminum company Norsk Hydro has signed an agreement to sell its rolling business to private equity firm KPS Capital Partners for €1.38bn ($1.64bn).
The aluminum maker noted in a statement on Friday that the move was in line with its strategy to improve profitability. The deal includes the sale of its seven rolling mills in Norway and Germany, R&D center, and its global sales offices for the product. The company said that the business’ 5,000 employees would also be part of the new ownership structure.
The transaction is expected to close in H2 2021 after which Einar Glomnes, currently the executive vice president and head of Hydro’s rolling business will take over as chief executive officer (CEO) of the new company.
The sale, according to Hilde Merete Aasheim, president and CEO, Hydro, will aid the company to make further investments in the low-carbon aluminum business. KPS, on its part, plans to develop the rolling business through further investment and exploring new business opportunities, according to Michael Psaros, co-founder and co-managing partner of KPS Capital Partners.
In 2020, the rolling business sold 864,000mt of products that included lithography, automotive, general engineering, cans, and foils. Revenue from the business was reported at around NOK24bn ($2.80bn) or 17pc of Hydro’s total revenue.