Dubai: Emirates Global Aluminium (EGA) announced Thursday the finalisation of a binding agreement to acquire Leichtmetall Aluminium Giesserei Hannover GmbH, a prominent German aluminium recycling company.
EGA is set to acquire 100 per cent of the firm from Leichtmetall Holding GmbH, a subsidiary of an investment fund managed by Quantum Capital Partners GmbH. “The transaction is expected to close during the first half of 2024, subject to obtaining regulatory approvals,” EGA said in a statement.
The transaction is EGA’s first significant acquisition since EGA was formed through the merger of Dubai Aluminium and Emirates Aluminium a decade ago.
Leichtmetall is a European speciality foundry that produces hard alloys and larger diameter billets with high proportions of secondary aluminium, EGA. The company uses renewable energy at its plant in Hannover, Germany, to produce up to 30 thousand tonnes per year of aluminium billets with secondary aluminium as some 80 per cent of input material. It has customers across Europe, particularly in Germany, Italy, and France.
Turning point
Abdulnasser Bin Kalban, CEO of Emirates Global Aluminium, said: “This acquisition provides EGA with a platform to develop a recycling business close to our customers in Europe, contributing to the emerging circular economy and building on our existing position as one of the biggest importers of primary aluminium on that continent. Leichtmetall will grow as part of EGA.”
Bin Kalban added, “The acquisition of Leichtmetall adds significant value to EGA and, alongside the recycling facility we are building in Abu Dhabi, is just the first step for EGA in capturing growth opportunities worldwide in low-carbon primary and recycled aluminium, expanding our business, and enabling us to reach net zero greenhouse gas emissions by 2050.”
Aluminium is infinitely recyclable. Recycling aluminium requires 95 per cent less energy than making new metal, resulting in a fraction of the greenhouse gas emissions of primary aluminium production.
Robust demand
Market analysts expect global demand for recycled aluminium to grow from 27 million tonnes annually in 2022 to 57 million tonnes in 2040. Recycled aluminium is expected to account for around 60 per cent of the growth in global aluminium supply between now and 2030 and around 70 per cent of supply growth between 2030 and 2040.
Adel Abubakar, Chief Marketing Officer of Emirates Global Aluminium, said, “The acquisition of Leichtmetall greatly enhances our ability to meet European high-end aluminium demand operationally and commercially and contributes to our carbon emissions reduction aspirations.
Leichtmetall, along with the 170 thousand tonnes per year aluminium recycling facility constructed in the UAE, will form a robust combination to shape the future of EGA, said Abubaker. Last year, EGA announced the start of construction of the UAE’s largest aluminium recycling plant in Al Taweelah, with a production capacity of 170 thousand tonnes per year. The new facility will supply local and global markets with low-carbon metal under the product name RevivAL.
Thomas Witte, Chief Executive Officer of Leichtmetall, said: “Becoming part of EGA, the largest ‘premium aluminium’ producer in the world, will unlock additional capital and resources for Leichtmetall to grow our business further, continue developing our technology, and strengthen our ability to partner with international customers in Europe and beyond.”
Steffen Görig, Chief Executive Officer of Quantum Capital Partners GmbH (QCP), said, “As managers of speciality carve-out investment funds, our job is to enable high-potential companies like Leichtmetall to develop and prosper.”
