Norsk Hydro ASA — M&A Activity 2023

Apr 27, 2023

Norsk Hydro: Hydro initiates renewed tender offer process for Polish recycler

Norsk Hydro: Hydro initiates renewed tender offer process for Polish recycler

Norsk Hydro ASA has relaunched a tender offer process for the acquisition of

100 percent of the shares of the Polish recycler Alumetal S.A. A tender offer

was first launched in April 2022, which later expired during the European

Commission's extended merger review.

The European Commission's merger review of the transaction is still pending with

a provisional decision deadline of May 23, 2023.

"The acquisition of Alumetal would be a strong strategic fit towards delivering

on Hydro's recycling strategy. We see a growing demand for recycled low-carbon

aluminum in Europe. Forward leaning customers are leading the way in

decarbonizing materials used in the production of automotive, building and

construction, and consumer durables," says Executive Vice President Eivind

Kallevik, Head of Hydro Aluminium Metal.

Recycling is an important enabler to strengthen Hydro's position in low-carbon

aluminium. The transaction will support Hydro's recycling position in Europe and

widen its product offering in the low-carbon and scrap based foundry alloy

market segment. Following the acquisition of Alumetal, Hydro will increase the

post-consumer scrap (PCS) usage of approximately 150,000 tonnes per year,

exceeding the company's 2020 ambition to double PCS by 2025.

"We have been impressed by the development of Alumetal, and by the quality of

production, modern assets, and of the competence of management and employees. We

hope to bring Alumetal into the Hydro family, to develop an even broader range

of low-carbon products for our customers," says Kallevik.

The acquisition will provide an annual EBITDA uplift of EUR 63 million based on

Alumetal's 2022 financials, supporting Hydro's ambition to increase recycling

EBITDA towards 2025 by NOK 500 million, and an additional NOK 500 million by

The tender offer process is for 100 percent of the shares of Alumetal S.A., a

company listed on the Warsaw Stock Exchange for 78.69 PLN per share in cash (the

"offer price"), representing an aggregate equity purchase price of approximately

PLN 1 230 million (approximately EUR 267 million).

The transaction implies an enterprise value of approximately PLN 1 617 million

(approximately EUR 351 million) based on the latest reported net debt as of

FY2022 and outstanding dividends payable of PLN 164,5 million (approximately EUR

36 million) with a dividend payment date on July 27, 2023.

Completion of the tender offer is subject to customary terms and conditions,

including obtaining merger clearance and gaining control of a minimum of 50

percent of total shares outstanding. Hydro has concluded an agreement with two

members of the Alumetal Supervisory Board and all members of the Alumetal

Management Board, in total holding approximately 39 percent of the company's

shares, who have undertaken to submit subscriptions in the tender offer for all

their shares at the offer price.

The subscription period for the tender offer is expected to run in June 2023.

Hydro aims to close the acquisition in early July 2023, subject to conditions

being fulfilled. Hydro reserves the right to extend the subscription period in

accordance with the terms and conditions of the tender offer. The Management

Board of the Alumetal is expected to issue its opinion by mid-June 2023.

Alumetal is the second largest producer of casting aluminium alloys in Europe

with a production capacity of 275,000 tonnes per year with three plants in

Poland and one in Hungary. The company sells its products primarily within

Europe and to the automotive sector, which represents the largest customer

group. Alumetal is also experienced in the sorting of post-consumer scrap (PCS)

and recently completed construction of a new, state-of-the-art sorting line.

Investor contact:

Line Haugetraa

+47 41406376

Media contact:

Halvor Molland

+47 92979797

This announcement is for informational purposes only and cannot be treated as an

offer or proposal to purchase shares, nor as a recommendation regarding

investment decisions in relation to the tender offer for the sale of shares in

Alumetal S.A., intention to announce by Hydro Aluminium AS which has been made

public on April 27, 2023 (the "Tender Offer") through Bank Pekao - Biuro

Maklerskie Pekao and Pekao Investment Banking S.A. as intermediary brokers. The

Tender Offer document (when published or as amended thereafter) will be the only

legally binding source of information on the terms of the Tender Offer and will

be the only legally binding document relating to the Tender Offer process. At

the same time, the Tender Offer should not be considered as a recommendation or

forecast from Hydro Aluminium AS, any Hydro group entity or Bank Pekao S.A.,

Pekao Investment Banking S.A. and entities from Bank Pekao S.A.'s capital group.