Norsk Hydro to Take Over Vale's Aluminium Business

Norsk Hydro ASA has signed an agreement to take over Vale S.A's aluminium businesses to form a resource-rich and fully integrated aluminium company, securing Hydro's bauxite supplies in a 100-year perspective.

Summary

• Hydro has entered into an agreement to combine the majority of Vale's bauxite, alumina and aluminium assets with Hydro's existing business.
• The transaction transforms Hydro into a fully integrated global aluminium company securing the company's bauxite supplies in 100-year perspective.
• Vale will receive a total consideration comprising USD 1.1 billion in cash and new Hydro shares equivalent to 22 percent ownership of its outstanding shares.
• As of April 30 and considering assumed net debt, this equates to a total consideration of USD 4.9 billion.
• Following the transaction, Hydro will have a long position in bauxite and alumina, the key input factors for aluminium production in addition to energy.
• To partly finance the transaction, support the company's investment grade rating and capacity to implement future projects, Hydro intends to launch a fully underwritten rights issue of NOK 10 billion (approximately USD 1.75