Hydro and Orkla to form the world's leading aluminium solutions

Hydro and Orkla to form the world's leading aluminium solutions
provider 
OSLO, NORWAY -- (Marketwire) -- 10/15/12 --  Norsk Hydro ASA and
Orkla ASA have agreed to combine their respective profiles, building
systems and tubing business, creating the world's leading 
aluminium
solutions provider. The new combined company, to be named
Sapa, will be a 50/50
joint venture owned by Hydro and Orkla. 
The agreement covers Profiles and Building System, as well as
Extruded and Welded tubes, of Orkla's fully-owned Sapa and all of
Hydro's Extruded Products
business area. 
Based on 2011 figures, the combined company will have around NOK 47
billion in
annual revenues, underlying EBITDA of around 1.9 billion
and approximately 25,000 employees.* The new company will have
leading positions in Europe and
North America, and strong footholds
in emerging markets, including Brazil, Argentina, China, India and
Vietnam. 
Completion of the transaction is expected to take place in the first
half of
2013, following approvals from relevant competition
authorities. Svein Tore Holsether, currently President and CEO of
Sapa, will be President and CEO, and
Arnstein Sletmoe, currently
Senior Vice President and Head of Mergers & Acquisitions in Hydro,
will be appointed CFO of the merged company. President
and CEO of
Hydro, Svein Richard Brandtzaeg, will be the chairman of the
company.
Sapa will have its headquarter in Oslo, Norway 
"Together we are creating a stronger company with a broader
competence base and
a highly experienced management team. In today's
very challenging market conditions, the combined company will be
better positioned for restructuring and value creation. This will
strengthen Orkla's ability to successfully capture the value
potential of our aluminium business," says Orkla's President and CEO
Age
Korsvold. 
"The new company will have the necessary strength to meet current
challenging
markets and create a platform for future growth in
emerging markets," says Hydro's President and CEO Svein Richard
Brandtzaeg. "This transaction will
contribute to strengthening Hydro
as a world-leading, resource-rich aluminium
company with robust
activities across the value chain. Through the combination
with Sapa,
Hydro is establishing a new structure for its extrusion business
positioned for improved profitability and potential for future
growth," he says. 
As part of the agreement, Hydro (through Hydro Aluminium AS) and
Orkla (through
Sapa Holding AB) will contribute their relevant
businesses to the new company in return for shares on a 50/50 basis.
To compensate for the difference in size and to harmonize certain
balance sheet items, Orkla will, in addition to its 50 percent
ownership, receive the amount of NOK 1.8 billion from the new
company.
The amount is expected to be paid within 6 months of
completion. 
Significant improvement efforts are ongoing in both entities and
will, together
with assumed annual synergies of around NOK 1 billion,
contribute to further
strengthening the new company. On a global
basis, demand for extruded aluminium
applications is expected to
continue its strong underlying growth. 
"Aluminium is the material of the future. To meet customers' high
demands, we
need to continue to excel in R&D, deliver with precision
and optimize our global
footprint. Both entities have demonstrated
their ability to increase quality and efficiency, and together we are
determined to bring out the best of the two companies into one," says
Svein Tore Holsether, President and CEO of Sapa. 
The agreement contains provisions whereby either party may initiate
an initial
public offering (IPO) process after approximately three
years from closing, and
where each party can decide to retain 34
percent. 
The new joint venture will be presented as an associated company
according to
the equity method. 
*) Illustrative figures for the new company 2011, unaudited 
********** 
This announcement and its appendices (collectively, the
"Announcement") has been
prepared by Norsk Hydro ASA ("Hydro") and
Orkla ASA ("Orkla") (jointly referred
to as the "Companies") solely
for the use at the announcement held in connection
with the
announcement of the combination of Hydro's aluminium extrusion and
building systems business and Orkla's aluminium extrusion and
building systems
currently conducted through Sapa AB, in a 50/50 owned
company (the "Joint Venture"). 
Statements in this announcement refer to the Joint Venture, but a
combination of said businesses is pending inter alia regulatory
approval and completion of the
transactions set out in the agreement
between the parties. 
Certain statements included within this Announcement contain
forward-looking information, including, without limitation, those
relating to (a) forecasts, projections and estimates, (b) statements
of Orkla's and Hydro's objectives and
strategies for the Joint
Venture  (c) targeted production volumes, capacities or rates,
start-up costs, cost reductions and profit objectives, (d) various
expectations about future developments in relevant markets, supply
and demand,
(e) results of operations, , (f) growth rates, (h) risk
management, as well as
(h) statements preceded by "expected",
"scheduled", "targeted", "planned", "proposed", "intended" or similar
expressions. 
Although the Companies believe that the expectations reflected in
such forward-looking statements are reasonable, these forward-looking
statements are based on a number of assumptions and forecasts that, by
their nature, involve material
risks and uncertainties. Various
factors could cause actual results or other
future positions to
differ materially from those projected in a forward-looking statement
or materially affect the extent to which a particular projection is
realized. Factors that could cause these differences include, but are
not 
limited to, changes in the availability and cost of energy and raw
materials;
global supply and demand for aluminium products; world
economic growth, including rates of inflation and industrial
production; changes in the relative
value of currencies and the value
of commodity contracts; trends in key markets
and competition; and
legislative, regulatory and political factors. 
No assurance can be given that such expectations will prove to have
been correct.  The Companies and the Joint Venture disclaim any
obligation to update
or revise any forward-looking statements,
whether as a result of new information, future events or otherwise. 
This Announcement has not been reviewed or approved by any regulatory
authority
or stock exchange. This Announcement is not a prospectus
and does not contain
the same level of information as a prospectus. 
The contents of this Announcement shall not be construed as an
investment advice. By attending or receiving this Announcement and/or
investing in the shares issued by any of the Companies, you
acknowledge and accept that you will
be solely responsible for your
own assessment of the market and the market position of, and other
factors of relevance to, the Companies and that you will
conduct your
own analysis and be solely responsible for forming your own view of
the potential future performance of the respective Company's business
and its
shares. 
This Announcement speaks as of October 15, 2012. 
This information is subject of the disclosure requirements pursuant
to section
5-12 of the Norwegian Securities Trading Act. 
Additional information and key figures:
http://hugin.info/106/R/1648862/531581.pdf 
This announcement is distributed by Thomson Reuters on behalf of
Thomson Reuters clients. The owner of this announcement warrants
that: 
(i) the releases contained herein are protected by copyright and
other applicable laws; and 
(ii) they are solely responsible for the content, accuracy and
originality of the information contained therein. 
Source: Norsk Hydro via Thomson Reuters ONE 
[HUG#1648862] 
Investor contacts
Contact
Rikard Lindqvist
Cellular    +47 41751199
E-mail      Rikard.Lindqvist@hydro.com 
Contact
Stian Hasle
Cellular    +47 97736022
E-mail      Stian.Hasle@hydro.com 
Press contact
Contact
Halvor Molland
Cellular    +47 92979797
E-mail      Halvor.Molland@hydro.com