Massive aluminium merger falls through

The French aluminium group, Pechiney, has confirmed that its mega-merger with the Canadian and Swiss concerns, Alcan and Algroup, has fallen through. However, Algroup says it will still go ahead with a merger with Alcan.

The French aluminium group, Pechiney, has confirmed that its mega-merger with the Canadian and Swiss concerns, Alcan and Algroup, has fallen through. However, Algroup says it will still go ahead with a merger with Alcan.

A statement issued by the Paris-based Pechiney group said its planned merger with Alcan and Algroup had failed because of Alcan’s refusal to give up its 50 per cent stake in the German aluminium producer, Norf.

The merger would have made the new joint company – to be known as APA – the world’s second largest aluminium concern.

However, the project already ran into trouble in mid-March when the European Commission ruled out Pechiney’s involvement in the deal because of concern over competition issues.

Algroup issued a statement in Zürich expressing regret at the failure of the merger. However, the company said it was still interested in going ahead with its merger agreement with Alcan.

“The parties have exhaustively investigated various restructuring possibilities which might meet the Commission’s concerns” said the statement.

A possible merger with Alcan, worth about $4 billion (SFr6 billion), to be achieved through an exchange of shares, still has to be approved by various interested parties, including Algroup’s shareholders.

Algroup’s statement said approval by the United States authorities was expected shortly.

Swissinfo and agencies