Three huge metal companies, including Alusuisse-Lonza (Algroup) based in Switzerland, announced Wednesday that they were to merge in a deal to create the world's largest aluminium company.This content was published on August 11, 1999 - 20:40
Three huge metal companies, including Alusuisse-Lonza (Algroup) based in Switzerland, announced Wednesday that they were to merge in a deal to create the world's largest aluminium company.
The agreement will see Zurich-based Algroup, Pechiney of France and Alcan Aluminium of Canada join together to take over from United States firm Alcoa as the world leader in aluminium.
In a statement issued in Zurich, Algroup CEO Sergio Marchionne (above) said Algroup's Lonza chemicals operation would be demerged to create Lonza Group Ltd., which would have SFr400 million ($268 million) cash at inception.
The statement by the three companies said the merger would come in the form of a share swap arrangement, with Alcan shareholders receiving 44 percent of shares in the new company, Pechiney 29 percent and Algroup 27 percent.
The new company would be registered in Montreal but would be directed from New York, with Alcan boss Jacques Bougie as chief executive officer, the statement said.
Marchionne told reporters he expected to see a five percent cut in overall staff numbers -- about 4,550 of the companies' combined staff of 91,000. He said he did not expect those job losses to affect operative staff in Switzerland.
The statement said the new company expected to achieve $600 million in annual savings within two years.
The news came the day after the three companies announced they were in "advanced discussions" about a merger.
Montreal-based Alcan is the world's second largest producer of aluminium. It recorded sales of $7.8 billion last year.
Pechiney, based in Paris, is the world's number four and had sales of $10.9 billion in 1998.
Algroup, the smallest of the three, nearly went broke in the 1980s after a series of disastrous forays into the United States but recorded sales last year of SFr9.6 billion ($6.4 billion).
Alcoa, the world's largest aluminium company, had sales of $15.3 billion in 1998.
From staff and wire reports.
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