Rio Tinto sells Alcan Cable unit for $185 million.
by The Canadian Press
Alcan Cable employs 1,051 people at five manufacturing facilities, a distribution centre, a North American technology development centre and an operation in China.
MONTREAL—Global mining giant Rio Tinto is selling 110-year-old Alcan Cable and its three Canadian operations to U.S.-based General Cable Corp. for US$185 million.
The London-based company said the sale is expected to close later this year after receiving required regulatory clearances.
Alcan Cable employs 1,051 people at five manufacturing facilities, a distribution centre in Woodbridge, Ont., a North American technology development centre and an operation in China.
In addition to production plants in Missouri and Pennsylvania, Alcan Cable operates manufacturing facilities in Jonquiere and Shawinigan, Que.
The Quebec plants make electrical and mechanical aluminum alloy redraw rod used in building wire and utility cables, along with aluminum overhead conductors and building wire.
General Cable is a Fortune 500 company headquartered in Highland Heights, Ky., that makes copper, aluminum and fibre optic wire and cable products for the energy, industrial, specialty and communications markets around the world.
It earned nearly US$84 million on US$5.87 billion of revenues last year. Prior to the deal being announced, it expected volume of metal used to increase by three to seven per cent and adjusted operating income to increase to between US$270 million and US$300 million.
Chief executive Gregory Lampert said the deal will bring its customers cost reductions, technology and product breadth.
“We will have additional production capacity in North America and globally to better meet your needs as the economy moves into recovery and eventual growth mode,” he added.
General Cable said the acquisition of Alcan Cable will allow it to enter the North American aluminum building wire market and add products for sale to its current customers.
Alcan Cable was founded in 1902, not long after Canada’s first aluminum smelter opened in Shawinigan. It provided the cable to transmit electricity to Montreal.
Its U.S. presence was started in 1939 with its first fabricating plant opening in 1963.
In 2010, Rio Tinto sold 61 per cent of Alcan Engineered Products, excluding Alcan Cable, to Apollo Global Management and the Fonds Strategique d’Investissement.
Rio Tinto retained a 39 per cent stake even though its sold the downstream assets that were part of the US$38.1 billion acquisition of Alcan in 2007.