By Marcus Leach
BP has announced that it has agreed the sale of its wholly-owned subsidiary, ARCO Aluminum Inc. to a special purpose vehicle incorporated by a consortium of Japanese companies.
ARCO Aluminum is a supplier of rolled aluminium sheet, used primarily in the production of beverage cans.
Under the terms of the agreement the consortium - comprised of Sumitomo Light Metal Industries, Ltd. (40 per cent), Furukawa Sky Aluminum Corp. (35 per cent), Sumitomo Corporation (20 per cent), Itochu Corporation (2 per cent), and Itochu Metals Corporation (3 per cent) - will pay BP $680 million in cash, subject to closing adjustments. Subject to obtaining required regulatory approvals, the parties expect to complete the transaction in the third quarter of 2011.
“Although a strong business, ARCO Aluminum is clearly a non-strategic asset for BP. Today’s agreement will deliver an attractive price for the business, unlocking its value for our shareholders,” said Bob Dudley, BP group chief executive.
BP remains on track to meet its target of achieving up to $30 billion of divestments by the end of 2011. Including ARCO Aluminum, BP has now entered into agreements for divestments with a total value of over $24 billion.
Based in Louisville, Kentucky, USA, ARCO Aluminum produces and markets a range of aluminium sheet for the major US domestic beverage can makers. The company owns an approximate 45 per cent interest in the aggregate assets of a joint venture aluminium rolling mill in Logan County, Kentucky - the largest and lowest cost producer of aluminium can sheet in North America. ARCO Aluminum sold over 650 million pounds of can sheet products in 2010.
RBS Securities acted as financial advisor to BP.