Alcan's £400m sale

BY JOHN SHEPHERD

British Alcan is negotiating with several potential buyers for its non-core assets - a group of businesses that turn over more than £400m a year and employ 4,200 people.

As first reported (right) in the Independent, the company - which is wholly owned by Alcan Aluminium of Canada - is selling 12 businesses in the UK plus others in the US and Ireland.

"British Alcan will remain as the UK's principal alumium smelting, rolling and alumina chemicals company, consistent with Alcan's worldwide strategy of concentrating on core businesses," a spokesman said.

Demand for aluminium is growing fast, and prices have risen from a low in real terms of $1,040 a ton in 1990 to almost $2,000 at the end of last year.

There was, he said, a great deal of logic in selling the businesses as a job lot.

"In many ways they are inter-related. There are benefits of size, balance and credibility. There are synergies in supply, technology and markets, the spokesman said.

Products of the non-core businesses include Bacofoil cooking wrap; gas cylinders; extrusions and tubes; plate, wire and cable; zirconium chemicals and magnesium alloys.

Also included is a nation-wide distribution chain. All the business are profitable, although the company declined to say how much they made.

It is understood that Midland Private Equity, the venture capital group, has tabled a bid, but a management buyout has been ruled out since the businesses are being sold as a package.

Alcan Smelting and Power, Alcan Rolled Products and Alcan Chemicals Europe, with a combined workforce of 2,800 and annual sales of £450m, are not affected.