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[April 2005]
Alcoa to Tender Its Elkem Shares for Significant Gain
Alcoa (New York, USA) has announced that it will accept the offer to tender its 46.5% stake in Elkem ASA to Orkla ASA for a total of approximately US$870 million in cash and an after-tax gain of approximately US$180 million. Settlement of the transaction is expected to occur on 5 April 2005.
Following the completion of this transaction, Alcoa will continue to hold a 50% stake in two aluminium smelters in Lista and Mosjoen (both in Norway), with a combined production capacity of 282,000 metric tons per year.
In January, Orkla increased its holdings in Elkem to a 50.03% stake and subsequently launched a mandatory offer to buy all remaining shares for NOK 236 each. Alcoa began purchasing shares in Elkem ASA in 1998 and its average cost base is NOK 132. Alcoa had previously made mandatory tender offers for the outstanding shares of Elkem on 9 January 2002 for NOK 155 and on 2 October 2002 for NOK 175.
The company remains committed to its existing Norway operations which include an automotive castings business in Lista in addition to the Norwegian smelters and a new jointly owned anode plant which is under development, that will serve the Norwegian smelters, and Alcoa's greenfield Icelandic smelter which is scheduled to begin production in 2007.
"We consider Elkem a well-run company with good prospects," said Alain Belda, Alcoa Chairman and CEO. "However, we see no point in remaining a minority partner. We prefer to manage our assets, and this offer gives our shareholders a very strong return on our investment in the company and allows us to use the cash more effectively on other projects with better returns."
ENDS