Norsk Hydro ASA — M&A Activity 2015

Oct 9, 2015

Norsk Hydro: Hydro enters LoI with Vale to raise MRN ownership to 45%

Norsk Hydro: Hydro enters LoI with Vale to raise MRN ownership to 45%

Hydro has signed a Letter of Intent (LoI) with Brazilian mining company Vale for

the possible acquisition of Vale's 40 % interest in Brazilian bauxite producer

Mineração Rio do Norte (MRN), which would strengthen Hydro's global position as

a long player in bauxite and alumina.

An eventual agreement will depend on the parties agreeing terms for Hydro to

acquire Vale's 40% interest in MRN, completion of Hydro's  due diligence

process, approval by the parties' Board of Directors and by the relevant

competition authorities. The parties will also seek support from the other MRN

shareholders to the transaction and will proceed in accordance with the terms of

the shareholders' agreement. MRN's current shareholders are Vale (40%), Alcoa

(18.2%), South 32 (14.8%), Rio Tinto (12%),CBA (10%) and Hydro (5%).

MRN is situated in the westernmost part of the state of Para, home to Hydro's

other Brazilian operations, and is Brazil's, and one of the world's largest

producers of bauxite. In operation since 1979, MRN currently employs around

1,400 employees and a significant number of contractors.

MRN is a well-operated mining operation with a competitive cost position due to

its high-quality bauxite, attractive strip ratio and economy-of-scale benefits

through its 18-million-tonnes-per-year production. In addition to mining

licenses covering a total 143,000 hectares, operations include mine

infrastructure and equipment, the Porto Trombetas township, railway, stockyard,

beneficiation plant, tailings disposal system, driers, port and power generation

facilities.

Hydro acquired Vales' other Brazilian aluminium assets in 2011, including the

57% interest in the Alunorte alumina refinery, the Paragominas bauxite mine, a

51% interest in the Albras smelter, and their 61 percent interest in the CAP

alumina refinery project, all located in the state of Para.  The 2011 agreement

also included commercial agreements for Vale's bauxite offtake in MRN

Investor contact

Contact Pål Kildemo

Cellular +47 97096711

E-mail Pal.Kildemo@hydro.com

Press contact

Contact Halvor Molland

Cellular +47 92979797

E-mail Halvor.Molland@hydro.com

Certain statements included within this announcement contain forward-looking

information, including, without limitation, those relating to (a) forecasts,

projections and estimates, (b) statements of management's plans, objectives and

strategies for Hydro, such as planned expansions, investments or other projects,

(c) targeted production volumes and costs, capacities or rates, start up costs,

cost reductions and profit objectives, (d) various expectations about future

developments in Hydro's markets, particularly prices, supply and demand and

competition, (e) results of operations, (f) margins, (g) growth rates, (h) risk

management, as well as (i) statements preceded by "expected", "scheduled",

"targeted", "planned", "proposed", "intended" or similar statements.

Although we 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 risk and

uncertainty. Various factors could cause our actual results to differ materially

from those projected in a forward-looking statement or affect the extent to

which a particular projection is realized. Factors that could cause these

differences include, but are not limited to: our continued ability to reposition

and restructure our upstream and downstream aluminium business; changes in

availability and cost of energy and raw materials; global supply and demand for

aluminium and 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 Hydro's key markets and

competition; and legislative, regulatory and political factors.

No assurance can be given that such expectations will prove to have been

correct. Hydro disclaims any obligation to update or revise any forward looking

statements, whether as a result of new information, future events or otherwise.

This information is subject of the disclosure requirements pursuant to section

5-12 of the Norwegian Securities Trading Act.

[HUG#1957748]