The agreement is in line with Hydro’s strategy to focus its extruded activities on profiles solutions and building systems.
The deal is expected to be cash neutral for Hydro, and an estimated after tax loss of NOK250M ($44.2M) will be recognised in Hydro’s fourth quarter 2009 results. The deal is expected to be completed by the end of the fourth quarter 2009 subject to clearance by relevant competition authorities and other anti-trust bodies.
Hydro’s automotive structures business is a supplier of crash management systems, roll-over bar protection systems and other structural components and assemblies, serving the majority of the global carmakers.
The business has a significant part of its production at Raufoss in Norway, with other plants in China, Czech Republic, Denmark, France, Germany, Sweden and the USA. Revenues amounted to NOK2.2bn ($340.4M) in 2008 and the business had about 1200 workers at the end of Q3 2009.
It posted a larger than expected third-quarter loss, hit by low prices, frail global growth and a weak US dollar, and said it remained cautious on the outlook for its business. It made an underlying operating loss of NOK793M ($143M) for the quarter, after a NOK1.5bn ($268M) profit a year ago.
“We remain cautious about the outlook for global aluminium demand and are concerned about the weakening US dollar,” CEO Svein Richard Brandtzaeg said. “In view of these challenges, we will consider additional restructuring and cost-saving measures,” he said.