This follows the announcement to the Oslo Stock Exchange on 10 January 2005 concerning Orkla's acquisition of a controlling interest in metals manufacturer.
Norwegian group Orkla boosted its ownership in the company to over 50 per cent, and now has formal approval to launch a takeover bid for the rest. Orkla values the whole company at $1.85 billion.
Elkem is the world's biggest producer of silicon metal and also makes ferrosilicon, aluminium and controls Swedish listed aluminium products firm Sapa. US aluminium giant Alcoa, which owns 46.5 per cent of Norwegian Elkem, said it was monitoring the situation.
Elkem has long been caught in the middle of Orkla and Alcoa, which also has a joint venture with Elkem in aluminium and has cooperated with it for decades. Alcoa made two failed takeover bids for Elkem in 2002. Nonetheless, Orkla has stressed the importance of continuing the good partnership with Alcoa in Elkem Aluminium.
Orkla, whose operating profit of NOK3.8 billion is made up of 40 per cent food, sees Elkem as a perfect fit within its business strategy, and sees the company as an ideal industrial opportunity. Orkla has available cash after selling out of a beer joint venture with Denmark's Carlsberg.
If Orkla acquires 100 per cent of Elkem, the group's average cost will be approximately NOK 180 per share. If the other shareholders choose not to sell their shares to Orkla, the group's average cost will be approximately NOK 125 per share.
Even after paying for the remaining Elkem shares (approximately NOK 7 billion) Orkla says it will still have substantial financial resources for further expansion of the group.
Orkla is one of the largest listed companies in Norway. The core businesses are branded consumer goods, chemicals and financial investments. The group is a leading supplier of branded consumer goods to the Nordic grocery market, holding many number one or two positions in strategically important product areas.