Alba to Acquire EU’s Largest Aluminum Smelter for US$2.2 Billion

Aluminium Bahrain (Alba) (LSE:78QZ) has agreed to acquire Aluminium Dunkerque, the EU's largest aluminum smelter, from American Industrial Partners in a deal valued at approximately US$2.2 billion.

The transaction, announced on Tuesday (June 2), will transfer 100 percent ownership of the French facility to the Bahraini operator, which currently runs the world's largest single-site smelter.

To maintain domestic oversight of a critical asset, French public investment bank Bpifrance will inject 100 million euros into the transaction. The capital investment will secure Bpifrance a 6 percent minority stake, as well as a seat on the board of directors of Aluminium Dunkerque’s holding company.

A memorandum of understanding for the agreement was signed in Paris during the Choose France Summit.

The ceremony was attended by Shaikh Salman bin Khalifa Al Khalifa, Bahrain's minister of finance and national economy, and Nicolas Forissier, France's minister delegate for foreign trade.

Located in Loon-Plage, Aluminium Dunkerque produces about 300,000 metric tons of aluminum annually.

"Alongside Alba, Bpifrance’s investment in Aluminium Dunkerque underscores our commitment to securing and reinforcing the long-term future of this strategic industrial site," Bpifrance CEO Nicolas Dufourcq said.

Aluminum prices are on the rise, climbing above US$3,700 per metric ton last week to a four year high. Physical availability has been squeezed by the ongoing Iran war and looming tariff adjustments by the Trump administration.

Furthering this surge is physical market tightness, where cash aluminum contracts recently traded at a US$116.50 per metric ton premium over three month futures — the largest backwardation spread since 2007.

Analysts see current supply/demand fundamentals for aluminum as the most bullish in at least half a century.

International supply chains are also bracing for regulatory shifts. The White House announced on Monday (June 1) that President Donald Trump has signed a proclamation amending Section 232 national security tariffs on metals.

Effective June 8, the order lowers tariffs on specific steel and aluminum derivative products, such as certain agricultural machinery and HVAC equipment, from 25 percent to 15 percent.

However, the amendment also imposes new 25 percent duties on aluminum lithographic plates and steel racks.

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Securities Disclosure: I, Giann Liguid, hold no direct investment interest in any company mentioned in this article.