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Norsk Hydro sells Hungarian unit to Nemak

Alfa SA, Mexico's second-largest industrial company, said its auto-parts unit Nemak agreed to pay €416 mln ($545 million) for the aluminum casting unit of Norway's Norsk Hydro ASA.

Monterrey-based Alfa SA will purchase four aluminum engine parts plants in Hungary, Germany, Austria and Sweden that are estimated to have 2006 sales of €485 million Alfa said in an e-mailed statement. “We are increasing our investment in a high-technology, differentiated business that operates in a growing segment of the automobile industry,” said Dionisio Garza, chairman and chief executive of Alfa, in the statement. The purchase agreement follows a November 2 announcement of the $500 million acquisition of six aluminum casting plants from TK Aluminium in Argentina, Brazil, China, Mexico, Poland and the US as Alfa begins to invest the €836 million ($1.1 billion) it netted from the sale of its steel unit last year. The four Norsk Hydro plants, which together produce the equivalent of 6 million aluminum motor heads a year, will generate in 2006 earnings before interest, taxes, depreciation and amortization -- a measure of cash flow known as Ebitda – of €72 million. Alfa is also Mexico's largest producer of plastic resins and processed meats and cheeses. (Bloomberg)