Arconic Inc., headquartered in Norcross, Georgia, has announced the divestiture of its Latin America Extrusions (LAE) business, which operates primarily in Brazil, to a subsidiary of Hydro Extruded Solutions AS, Norway.
The business is part of the company’s Transportation and Construction Solutions segment. Following customary regulatory and anti-trust reviews, the ownership of LAE will be transferred to a subsidiary of Hydro Extruded Solutions AS. The deal is expected to close in the first half of 2018.
The divestiture is part of Arconic’s continued drive to streamline its business portfolio, reduce complexity and further focus on its higher-margin products and continuous profitable growth, according to the company.
Under the terms of the agreement, Arconic says it will receive approximately $10 million in cash for the LAE business, subject to working capital and other adjustments. As a result of the transaction, Arconic will recognize a restructuring-related charge representing the loss on sale of approximately $40 million after-tax, or 8 cents per diluted share, in the fourth quarter of 2017, as referenced in the company’s third quarter Form 10-Q filing. The charge primarily relates to the noncash impairment of the net book value of the business. The charge is a special item and will not impact adjusted earnings per share.
Working in close partnership with its customers, Arconic says it works to solve complex engineering challenges to transform the way people fly, drive, build and power.
Hydro is a fully integrated aluminum company with 35,000 employees in 40 countries. In addition to production of primary aluminum, rolled and extruded products and recycling, Hydro also extracts bauxite, refines alumina and generates energy. The extrusion business, former Sapa, was fully acquired by Hydro in October 2017, and is a world leader in innovative aluminum solutions.