Alcan boosts Alouette stake (August 16, 2002)

Montreal-based Alcan (AL-T) has doubled to 40% its stake in the 243,000-tonne, low-cost Aluminerie Alouette aluminum smelter in Sept- Iles, Quebec.

Alcan, which already had a 20% stake in the smelter, grabbed Anglo-Dutch steel maker Corus Group’s 20% stake for about US$165 million. Corus says the sale is part of its previously announced plan to exit the aluminum business to focus on carbon steels.The company hopes to part with the rest of its aluminum assets by year-end.

The smelter’s remaining stakeholders are Norsk Hydro and Austria Metall with 20% apiece, SGF with 13.33% and Marubeni with 6.67%.

Says Travis Engen, Alcan’s CEO: “Doubling our stake in the Alouette smelter further increases the attractive growth opportunities open to Alcan. The future expansion of the Alouette smelter and greater potential to leverage value creating synergies within our Quebec smelter system lie ahead.”

The deal still needs regulatory approvals and is expected to wrap up by the end of Sept.

Alcan recently posted second-quarter net income of US$70 million (US22 per diluted share) on sales and operating revenue of US$3.2 billion. This compares with a profit of US$72 million (22 per share) on US$3.2 billion in revenue during the corresponding period of 2001.

Profits in the recent quarter were hampered by US$70 million worth of foreign-currency translation charges plus US$8 million in non-recurring charges.

Shipments of aluminum in all forms during the period totalled 1.1 million tonnes, up 1% from a year earlier.