Vale Completes $5.27 Billion Alumina, Bauxite Sale to Hydro

Vale SA, the world’s largest iron ore producer, completed the sale of bauxite and alumina assets to Norwegian aluminum producer Norsk Hydro ASA.

Vale acquired 22 percent, or $3.5 billion, of Hydro’s outstanding shares, and received $503 million in cash for the assets, Vale said in a statement today. Vale also transferred “off-take rights and outstanding commercial contracts” and net debt of $655 million to Hydro, according to the statement.

The transaction will be valued at about $5.27 billion at its closing, Hydro said in an earlier statement. It was worth $4.9 billion on May 2, when it announced the deal. Vale also sold 60 percent of the Paragominas bauxite mine to Hydro for $578 million in cash, according to the Brazilian company.

Hydro, which will obtain a century of raw material from Vale’s bauxite mining and alumina refinery assets in Brazil, postponed the completion from the fourth quarter because of delays in obtaining approval from regulators.

Hydro will buy the remaining 40 percent of Paragominas in two equal tranches in 2013 and 2015, for $200 million each, according to the statements.

Vale, with 447.83 million shares, became the second-biggest shareholder after the Norwegian state, with 34.8 percent.