CHICAGO The European Commission has approved a 50-50 joint venture between Norsk Hydro ASA and Orkla ASA, the companies announced May 13.
The transaction is expected to be completed in the third quarter of 2013 "at the latest," pending approval from Chinese antitrust authorities, the companies said in separate statements. Both firms expect Chinese officials to approve the project given the companies "limited overlap" in China, they said.
Svein Tore Holsether, chief executive officer of Orkla subsidiary Sapa Group, will serve as chief executive officer of the joint venture, which will be named Sapa. "We have now achieved another important milestone in forming the worlds leading provider of aluminum solutions," Holsether said in a statement. "Combining the two companies will strengthen our offering to our customers across the globe."
Hydro and Orkla, both based in Oslo, Norway, proposed combining their aluminum profiles, building systems and tubing businesses last year (amm.com, Oct. 15). The U.S. Department of Justice has already given the transaction a green light.
Approval from the European Commission comes with the condition that Hydro sells its extrusion plant in Raufoss, Norway, and its affiliated fabrication plant in Vetlanda, Sweden, the companies said. In addition, the deal requires Sapa Group to sell its multiport extrusion operations in Harderwijk, Netherlands.
Last month, Hydro and Orkla proposed divesting the facilities in case the European Commission required it as a condition for the merger (amm.com, April 19). The companies said that they have begun the divestiture process.
In a related development, Hydro said that Arnstein Sletmoe, who has been named chief financial officer of the new joint venture, will lead Hydros extruded products from June 1 until the deal closes. Sletmoe will report to Hydro chief executive officer Svein Richard Brandtzæg but will not be part of the companys corporate management board.
Hydro previously announced that it has tapped executive vice president of extruded products Hans-Joachim Kock to take over as head of finance for the companys bauxite and aluminum business (amm.com, Jan. 18). He will leave the management board.