Norwegian aluminum producer Norsk Hydro ASA (NHY.OS) and consumer goods conglomerate Orkla ASA (ORK.OS) said Thursday they would be prepared to make changes to their proposed aluminium extrusions joint venture to obtain competition clearance from the European Union.
Following the agreement between Norsk Hydro ASA and Orkla ASA to combine their respective aluminium extrusion businesses, the European Commission has expressed preliminary concerns regarding the possible competitive effects of the intended merger in certain markets.
The concerns relate to multi-port extrusions (MPE) in Europe and soft-alloy extrusions in the Nordic region, in this context defined as Norway and Sweden.
In response to the concerns expressed by the European Commission, Orkla and Hydro propose, if required, to divest their MPE business at Harderwijk in the Netherlands and Hydro's extrusion plant at Raufoss in Norway, including Hydro's affiliated fabrication plant in Vetlanda, Sweden.
The European Commission's initial review period will be extended until 14 May 2013. Provided that it approves the joint venture transaction subject to these conditions, a divestment process of the plants will be initiated.
Hydro and Orkla expect the planned joint venture transaction, retaining the company name Sapa, to be completed in the first half of 2013.
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