The formation of the new company will impact the North American market where both companies have leading market positions.
The new business will embrace the activities of Orkla’s existing Sapa-branded business (value-added profiles and profile-based building systems) and Hydro’s extruded products output.
Svein Tore Holsether, who is currently president and CEO of Orkla’s Sapa division, will become president and CEO of the new joint venture company. Arnstein Sletmoe, Hydro’s head of mergers and acquisitions, will be the CFO of the new venture. Svein Richard Brandtzaeg will be chairman.
It is estimated that the new joint venture, which will become official during the first half of 2013, will have annual revenues in the region of NOK47 billion, underlying EBITDA of NOK1.9 billion and approximately 25,000 employees.
According to Brandtzaeg, the new company will have the necessary strength to meet current challenging markets and create a platform for future growth in emerging markets. “This transaction will contribute to strengthening Hydro as a world-leading, resource-rich aluminium company with robust activities across the value chain,” he said.
Svein Tore Holsether, the joint venture’s president and CEO, said that the new business will need to excel in terms of R&D in order to meet the high demands of customers. He believes that both companies will bring out the best in one another and claims that ‘aluminium is the material of the future’.