Aug 6 2010
Rio Tinto has received a binding offer from funds affiliated with Apollo Global Management, L.P. (Apollo) and the Fonds Stratégique d'Investissement (FSI) to buy a 61 per cent stake in Alcan Engineered Products (AEP), excluding the Cable Division.
The transaction follows the successful divestment last year of the Composites division of the Engineered Products business. The terms of the transaction are confidential.
Under the terms of the transaction, Apollo would become the majority and managing shareholder in AEP with a 51 per cent stake in a new holding company for AEP, with the FSI holding 10 per cent. Rio Tinto would hold a 39 per cent stake. Rio Tinto will respond to this binding offer following consultation with the relevant employee representatives.
Guy Elliott, Chief Financial Officer, Rio Tinto, said: "This potential sale of a majority stake to Apollo and FSI is in line with our strategy of divesting non-core assets of Rio Tinto Alcan. When this transaction is completed, we will have exited all downstream businesses, except Alcan Cable. We look forward to participating in the upside potential of AEP, both as a minority shareholder and key supplier to the business."
Rio Tinto has completed divestments in excess of US$10.3 billion since the beginning of 2008. In 2010, the Group has completed divestments of US$3.6 billion comprising Alcan Packaging Food Americas, Alcan Packaging global Pharmaceuticals, global Tobacco, Food Europe and Food Asia divisions, Vickery (Coal & Allied), Maules Creek (Coal & Allied), Alcan Beauty Packaging and Alcan Medical Flexibles.