Kaiser Aluminum Signs Letter of Intent to Sell Interest in AKW to Accuride Corporation, Expects Substantial Gain
HOUSTON--(BUSINESS WIRE)--Jan. 28, 1999--Kaiser Aluminum & Chemical Corporation, the operating subsidiary of Kaiser Aluminum Corporation (NYSE:KLU), said today that it has signed a non-binding letter of intent to sell its 50% interest in AKW to Accuride Corporation, Kaiser's partner in the joint venture.
AKW was formed in 1997 to design, manufacture, and sell heavy duty aluminum wheels.
"The transaction is another step in the strategic reassessment of our businesses," said George T. Haymaker, Jr., chairman and chief executive officer of Kaiser. "We have said that a key element of this reassessment is ensuring that each of our businesses is positioned to reach its full potential. In some cases, such as with AKW, that means the 'natural owner' of a given business may be a company other than Kaiser. We have been pleased by the performance of this joint venture, which has added considerable value to the truck wheel business in which Kaiser has been engaged for many years. As we look to the future, however, we believe that a company focused in the wheel business, such as Accuride, is the logical party to carry the development of AKW to the next level. The transaction provides us an opportunity to capture significant near-term value which can be redeployed toward our other strategic priorities."
Although the proposed sale price was not disclosed, Kaiser expects to record a substantial gain on the transaction. The transaction is subject to various conditions -- including the negotiation of definitive agreements, third party consents and board approvals -- and is scheduled to close during the first quarter of 1999.
Accuride Corporation is North America's largest manufacturer and supplier of wheels for heavy/medium trucks and trailers. The company offers the broadest product line in North American heavy/medium wheels. Accuride Corporation also produces wheels for buses, commercial light trucks and sport utility vehicles, and passenger cars. Accuride Corporation has steel wheel operations in Henderson, Ky.; Columbia, Tenn.; London, Ontario Canada; and at its joint venture in Monterrey, Mexico. Accuride Corporation is involved in the production and sales of aluminum wheels through a joint venture arrangement in Erie, Pa., and in a commercial tire and wheel assembly joint venture in Springfield, Ohio |
