Pechiney bids for Corus aluminium
the aluminium assets of Corus, which analysts believe are worth as
much as €1.6 billion
Pechiney, the French metals and packaging company, is bidding for the aluminium assets of Corus, which analysts believe are worth between £800 million (€1,235m) and £1 billion.
Corus put the assets up for sale in March as part of a strategy to focus on its core steel-making activities.
The decision came amid consolidation in the aluminium industry and continuing weakening demand for the metal.
Pechiney is aiming to increase its earnings through a mixture of organic growth and acquisitions.
It has pledged to spend an average of €500 million annually on purchases over the next four years.
It is also planning to build a $1.6 billion (€1.7bn) smelter, either in South Africa or in Australia.
An official from the Paris-based group confirmed that it was in process of competing for the Corus assets as part of a multi-stage bidding process.
The company was blocked in 2000 from a three-way merger with Alcan and Algroup because of competition concerns.
But Pechiney now considers that it could make a bid for Corus' assets without falling foul of antitrust regulations.
Corus, which is advised by UBS Warburg, said it had drawn up a shortlist of potential buyers and hoped to finalise a sale during the summer. The group has received "a lot of interest", and said that the small number of companies it was still talking to had all the information necessary to carry out due diligence.
The company declined to say who the other potential buyers were, but analysts believe they are likely to include Alcoa of the US, Alcan of Canada and Norsk Hydro of Norway.
Corus' aluminium division had sales of £1.2 billion in 2000, accounting for approximately 10 per cent of the group's turnover. But the company has said its aluminium activities lack the critical mass needed to survive in an increasingly competitive market.
Aluminium prices have made only a weak recovery after being hit by lower demand for the metal following the September 11 attacks on the US. Pechiney last month reported a 61 per cent fall in first-quarter profits but said it was confident of achieving stable earnings over the full year.
