Hydro said that its decision is in line with the company’s strategy of divesting non-core operations in order to concentrate on power production and aluminum.
As part of this strategy, Hydro recently renamed its polymers business Kerling and considered divesting or listing the unit. Hydro said that, following the agreement with Ineos, the application for listing on the Oslo Stock Exchange will be withdrawn.
The NOK5.5 billion price tag for Kerling includes net debt and equity as of December 31, 2006. Hydro expects to see a gain of approximately NOK400 million from the transaction after tax. The deal is expected to close in the third quarter of 2007.
We believe this solution will contribute to a continued strong development of the polymers business, said Hydro president and CEO Eivind Reiten.
Kerling has production facilities in Norway, Sweden and the UK, as well as interests in joint venture petrochemical operations, including the ethylene cracker at Rafnes in Norway.
Hydro said that the transaction is subject to clearance by European Union competition authorities and other relevant anti-trust bodies.
