By Dominic Chopping

Norwegian aluminum and renewable energy company Norsk Hydro ASA on Friday announced a bid worth 1.33 billion Polish zloty ($297.6 million) for Polish recycler Alumetal S.A.

Norsk Hydro said the deal will strengthen its recycling position in Europe and widen its product offering in the low-carbon and scrap-based foundry alloy market.

The Norwegian company aims to double its recycling of post-consumer scrap and to increase annual recycling earnings before interest, taxes, depreciation and amortization by 700 million to 1.1 billion Norwegian kroner ($74.3 million-$116.7 million) by 2025.

Alumetal produces casting aluminium alloys and has a production capacity of 275,000 metric tons a year, with three plants in Poland and one in Hungary. The company sells its products primarily within Europe to the automotive sector and is experienced in the sorting of post-consumer scrap.

The acquisition will add annual Ebitda of 47 million euros ($49.4 million) based on 2021 financials, it added.

The PLN68.4 a share bid represents a 4.7% premium to Thursday's closing price and equates to an aggregate equity purchase price of around PLN1.07 billion, implying an enterprise value of around PLN1.33 billion.

Norsk Hydro said it has committments to the deal from the Alumetal management board holding 39% of the company's shares.

Write to Dominic Chopping at dominic.chopping@wsj.com

(END) Dow Jones Newswires

April 29, 2022 02:13 ET (06:13 GMT)

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