Hydro signs agreement to sell polymers business
Norsk Hydro ASA has entered into an agreement to sell its polymers activities to the UK-based chemicals company INEOS for approximately NOK 5.5 billion for net debt and equity as of 31 December 2006. The agreement represents a good, long-term industrial solution for Hydro's polymers business.
The agreed payment is subject to closing adjustments including changes in equity until the closing of the transaction, which is expected in the third quarter 2007. Hydro expects a gain on the transaction of approximately NOK 400 million after tax, based on International Financial Reporting Standards (IFRS).
The deal with INEOS is in line with Hydro's strategy to focus on aluminium and power production and divest non-core assets. The company has considered divesting or listing its polymers unit, which was recently named Kerling ASA. Following the agreement with INEOS, the application for listing on the Oslo Stock Exchange will be withdrawn.
The transaction is subject to clearance by EU competition authorities and other relevant anti-trust bodies. The sale of the 29.7 percent ownership interest in Qatar Vinyl Company (QVC) is subject to pre-emption rights.
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