Trimet and EDF to buy Rio Tinto's two French aluminum plants
16 July 2013
Germany's largest aluminium producer, Trimet Aluminium SE, and state-run utility Electricité de France SA (EDF), are jointly buying Rio Tinto's two struggling aluminium plants in France for an undisclosed sum.
|Dr. Martin Iffert, CEO of Essen-based Trimet|
The proposed sale comes as a relief for the French government since the London-based miner was planning to shut the mine if it could not find a buyer, leading to more than 500 job losses.
Trimet and EDF will buy Rio Tinto Alcan's St. Jean-de-Maurienne aluminum smelter and Castelsarrasin casting facility in France, with Trimet taking a 65-per cent stake, while EDF will take the remaining 35 per cent.
French state-owned investment bank BPI may later buy a minority stake.
The aluminum plants produce aluminum wire rods used to make electric cabling for the energy industry and connecting elements for the automobile industry, among other things.
The buyers plan to invest €200 million over the next six years in modernising the facilities, but did not disclose the financial terms of the deal.
The two aluminum plants were acquired in 2003 by Canadian aluminum giant Alcan from French aluminum producer Pechiney, which was earlier owned by the state and privatised in 1995.
Rio Tinto acquired Alcan in 2007 for $38.1 billion in a highly leveraged buyout at the height of the commodities boom.
Trimet said that the acquisition will secure the long-term supply of aluminum oxide and electric power, key requirements for the production of aluminum.
"There is enormous demand for aluminum wire rod in the manufacturing industry in Europe. As a provider of complex alloys and customised solutions, this product group will enable us to strengthen our core competence as a supplier of special products on a long-term basis," said Dr. Martin Iffert, CEO of Essen-based Trimet.
"This is an important step towards the contemplated divestment of the St. Jean-de-Maurienne and Castelsarrasin assets. It was made possible through constructive dialogue with both Trimet and the French government, particularly the ministry of industrial renewal,'' said, Jacynthe Côté, CEO of Rio Tinto Alcan.
''The sale of these facilities underscores our strategy to streamline Rio Tinto Alcan, through the divestment of non-core assets, so that it is focused only on our lowest cost businesses," he added.