OSLO (Reuters) - Brazilian miner Vale VALE5.SA will put up for sale most of its shares in Norwegian aluminum producer Norsk Hydro (NHY.OL) in a planned exit from an asset it has long considered non-core, the company said on Monday in a securities filing.
Vale, which holds 21.6 percent of Hydro, said it will 407.1 million Hydro shares in an accelerated bookbuild and may also sell another 40.7 million through an overallotment option, potentially ending its stake in Hydro.
If the overallotment option is not exercised Vale’s stake would be reduced to 2 percent of Hydro, the Vale filing said.
“The offering of Hydro shares is consistent with Vale’s strategy of reducing its exposure to non-core assets, and a result of its focus on discipline in capital allocation and value maximization for shareholders,” Vale said.
The firms had initially said Vale would offer 224 million Hydro shares in an accelerated bookbuild and could also sell another 22.4 million through the overallotment option, potentially reducing its stake to 9.74 percent.
Vale, the world’s second-largest mining company, took the stake in 2011 as partial payment for the Norwegian company’s $4.9 billion purchase of alumina and bauxite assets, and its sale is part of efforts to cut its exposure to non-strategic assets and focus its capital allocation.
Vale, the world’s top iron ore miner, is Hydro’s second biggest shareholder after the Norwegian government, which owns 34 percent of the firm.
Vale has agreed to not sell any further Hydro shares for 180 days after the bookbuld offer was concluded.
The companies did not give a time schedule for the sale. Norway’s DNB Markets and Morgan Stanley are acting as joint global coordinators and joint bookrunners in the offering.
Reporting by Balazs Koranyi in Oslo and Roberto Samora in Sao Paulo; Editing by David Evans and David Gregorio