AoG comes under Greek control

Aluminium of Greece (AoG), the country’s biggest industrial concern when established by France’s Pechiney in 1960, is to come under the control of mining, metallurgy and defense group Mytilineos Holdings, according to a deal announced yesterday. The Greek group agreed to buy a 53 percent interest in AoG from Canada’s Alcan Primary Metal Group, the world’s second-biggest aluminium producer, which owns 60 percent (or 12.98 million shares), for 79.5 million euros. «The above transaction constitutes the best alternative option for Alcan and will contribute to the long-term stability of Aluminium of Greece,» said Cynthia Caroll, president and chief executive officer of Alcan, which acquired control of Pechiney last year. Mytilineos and Switzerland’s Glencore group had submitted binding bids in October, after a tender by Alcan and while it was considering alternative options. The deal announced yesterday also provides the right of first refusal to Mytilineos for the acquisition of Alcan’s remaining 7 percent stake. It has been so structured to prevent a public offering with a view to delisting AoG from the Athens Stock Exchange (ASE). The transaction was agreed at the especially low price of 6.95 euros per share. On news of the deal, AoG’s share price crashed, closing 17.45 percent lower at 10.50 euros yesterday. According to the agreement, which is expected to be completed within the first quarter of 2005, Alcan will continue technical and industrial support to AoG. The acquisition is a significant step in the further growth of our group, said CEO Evangelos Mytilineos. AoG has enjoyed particularly low electricity rates since its founding, on the basis of a special agreement with the Public Power Corporation that had been criticized as «colonial.» The agreement ends in 2006 and Alcan had been evaluating a proposed investment in a combined steam and power production plant with a view to achieving 100 percent power sufficiency. The company’s plant in Viotia produces alumina (aluminum oxide) and aluminium using bauxite as its raw material, which is supplied from a company-owned mine and S&B Industrial Minerals of the Kyriakopoulos Group. It currently employs 2,000. Separately yesterday, Alcan also announced the sale of its French ferroalloy subsidiary, Pechiney Electrometallurgie, to Spain’s Ferroatlantica SL for more than 100 million euros ($136.3 million), according to a Reuters dispatch from Vancouver. «This agreement is compelling for Alcan and consistent with our strategy of focusing on primary aluminum and divesting non-core activities,» said Carroll. Pechiney Electrometallurgie has 10 plants in France that produce silicon, ferro-silicon and calcium metal and silicide.