UAE’s EGA completes acquisition of Leichtmetall in European expansion push

Company's new German operation uses renewable energy to produce up to 30,000 tonnes per year of billets

Leichtmetall produces hard alloys and larger diameter billets, with uses including manufacturing high load bearing extruded profiles and very large forged components. EGA
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Emirates Global Aluminium, the UAE’s largest industrial company outside the oil and gas sector, has completed the acquisition of Germany's Leichtmetall Aluminium as it looks to expand its presence in Europe’s aluminium recycling market.

EGA acquired the company from Leichtmetall Holding, a subsidiary of an investment fund managed by Quantum Capital Partners.

The transaction has cleared all required regulatory approvals and closing conditions, EGA said in a statement on Friday.

No financial details of the acquisition were disclosed.

The acquisition is EGA’s first major transaction since the company’s formation a decade ago through the merger of Dubai Aluminium and Emirates Aluminium.

“For EGA, today is an important early milestone in our drive to build an aluminium recycling business in Europe, where we are already a major primary aluminium supplier, and around the world,” said Abdulnasser bin Kalban, chief executive of EGA.

“Becoming part of the biggest premium aluminium producer in the world will give Leichtmetall new strength for its customers and to grow.”

EGA's new German operation is a speciality foundry that uses renewable energy to produce up to 30,000 tonnes per year of billets, with secondary aluminium comprising about 80 per cent of the input material, it said.

The UAE-based company exports more than 600,000 tonnes of primary aluminium to Europe each year and is a significant supplier for industries including automotive and construction.

“This is an exciting moment for Leichtmetall, as we join forces with one of the biggest and most ambitious aluminium producers in the world and a major aluminium supplier in Europe,” said Thomas Witte, chief executive of Leichtmetall.

The UAE is the fifth biggest producer of aluminium in the world after China, India, Russia and Canada, with Bahrain in sixth position, according to the London-based commodities research firm CRU Group.

The GCC region is an important producer of primary aluminium with a total production of 6.08 million tonnes representing about 9 per cent of the total global production in 2023, with 44 per cent of the total GCC production coming from the Emirates.

Aluminium producers from the GCC are expected to boost exports to the US and European markets after the US and UK banned trading of Russian aluminium, copper and nickel on global metal exchanges and prohibited their imports into the US, according to analysts and company executives.

Earlier this month, the US Treasury Department, in co-ordination with the UK, introduced two new prohibitions to curtail the revenue that Russia earns from aluminium, copper and nickel exports amid its continuing invasion of Ukraine.

As part of the measures, the US banned the import of Russian aluminium, copper and nickel produced on or after April 13.

Updated: May 03, 2024, 12:10 PM