Vale (NYSE:VALE) Sells Aluminum Assets to Norsk Hydro for $4.9 Billion

The sale of the aluminum assets of Vale SA  (NYSE:VALE) to Norsk Hydro will give the Norwegian-based company a long term supply of the metal which will last for many years.

As a result of the $4.9 billion deal, Norsk will gain control of the third-largest bauxite mine in the world - Paragominas, along with aluminium production and alumina refining facilities located in Brazil.

Norsk said this will significantly increase their competitiveness by having the ability to offer its customers a supply of raw materials at a good price for a long period of time.

Terms of the deal are Vale will receive $1.1 billion in cash upfront, $700 million of assumed debt, and Vale will get a 22 percent stake in Norsk Hydro, completing the deal.

Once the deal is closed, the Norwegian government, which owns 43.8 percent of Norsk now, will have its stake trimmed to 34.5 percent.

Some of the financing will be raised by Norsk through a $1.7 billion fully underwritten rights issue.
 
Other properties taken over by Norsk will be 91 percent of the stake Vale has in Alunorte, the largest alumina refinery in the world; 81 percent of an alumina refinery currently being developed; and 51 percent of the Albras aluminum plant.