British Aluminium regains independence

MAGNUS GRIMOND

British Aluminium, one of the great names of British industry, has regained its independence through a pounds 200m buy-out from Alcan Aluminium, the Canadian group. A management group, led by Jeff Whalley, the chairman of the FKI engineering group, has acquired a portfolio of downstream businesses ranging from Baco aluminium cooking foil to an operation making components for the aerospace to architectural industries from British Alcan Aluminium.

Around a dozen senior executives will own 15 per cent of the equity in the new British Aluminium, including chief executive Ian McKinnon, who led the buy-out of Leyland Bus, and finance director Brian Purves, currently a member of the executive committee of Rover Group. The 12 businesses involved in the deal, both in the US and UK, made profits of more than pounds 25m on sales which topped pounds 500m last year. The buy-out is being backed by equity from Mercury Development Capital, Morgan Grenfell Development Capital and CVC Capital Partners.

Bob Bailey, corporate development director, said there were no short- term plans to float the new company. "But looking at the backers involved, that is an option they will want to consider in the next three to five years."

The original British Aluminium Company was formed in 1894 and was a pioneer in the development of uses for aluminium, but has had a more chequered recent history. In 1958 it was at the centre of one of the first big contested takeover bids, which rocked the City and helped make the name of Sir Siegmund Warburg, founder of SG Warburg, the merchant bank. In the early 1980s it was again thrust into controversy over its closure of Invergordon aluminium smelter near Inverness at the cost of hundreds of jobs and the seat of the local Conservative MP.