BlueStar, a state-run company under China National Chemical Corp., that’s 20 percent owned by Blackstone, will buy is purchasing Elkem’s silicon materials, foundry products, carbon and solar divisions for cash, Oslo-based Orkla said in a statement.
Silicon is used to make parts for solar power generation and electronics. The company is selling its Elkem assets to cut debt and focus on its main businesses.
“Elkem Solar has been a disappointing investment for Orkla,” Jakob Vossgaard, head of Norwegian Equities at Nordea Investment Management, told Bloomberg News.
“The transaction makes industrial sense, and is in line with their strategy to make the company more focused,” Vossgaard said.
The sale, expected to be completed in the first half, needs approval from China’s antitrust regulator and Commerce Ministry, Orkla said. It has already been approved by the National Development and Reform Commission, China’s top planning agency.
“China is or will be the biggest and highest-growth market for silicon metal, foundry products, solar-grade silicon and other products offered by Elkem,” said Helge Aasen, CEO of Elkem “I believe that by joining forces with Bluestar Elkem will have a strong platform for promoting its technological leadership and securing a prosperous development going forward.
“For Elkem, with Bluestar as our new owner, we will achieve one of our main targets, namely a stronger presence in Asia in general and in China in particular,” Aasen continued. “This will strengthen the position of our plants, both in Norway and in the rest of the world. In addition, Elkem will also have the opportunity to take a leading role in the upgrading and further development of Bluestar’s silicon-related operations, especially in China.”
China, the world’s largest energy user, raised solar power subsidies 50 percent to$453 million (€349 million) in 2010 to help expand the domestic market.
The transaction adds to the silicon assets of Lyon, France- based BlueStar Silicones International, which has 10 plants and annual sales of $650 million.
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