LONDON—BP PLC on Monday said it had agreed to sell its ARCO Aluminum Inc. unit to a Japanese consortium for $680 million, as it steps up a divestment program to recoup the costs of its Gulf of Mexico oil spill.
The cash sale, which brings BP closer to its $30 billion divestment target set to cover an expected bill of $40 billion relating to the oil spill off the U.S. coast last year, was described as "encouraging news" by a trader.
BP will sell the unit, inherited from its merger with Arco in 2000, to a consortium in which the largest shareholders are Furukawa Sky Aluminum Corp., Sumitomo Corp. and Sumitomo Light Metal Industries Ltd.
The Louisville, Kentucky-based business, which produces aluminium sheet for U.S. beverage can makers, has been taking advantage of rising aluminum prices as a global economic recovery boosts demand.
"Although a strong business, ARCO Aluminum is clearly a nonstrategic asset," BP's Chief Executive Bob Dudley said. "Today's agreement will deliver an attractive price for the business, unlocking its value for our shareholders."
The parties expect the transaction, which is subject to regulatory approvals and closing adjustments, to be completed in the third quarter. BP said that, including the ARCO Aluminum deal, it had now entered into divestment agreements valued at over $24 billion.
Last month it announced the sale of some U.S. fuel storage and pipeline assets for $225 million and of a Colorado natural gas processing plant for $575.5 million. In February, the company also confirmed it would market some oil and gas interests in the U.K., the North Sea component of which is reportedly valued at $1 billion.
The cash sale, which brings BP closer to its $30 billion divestment target set to cover an expected bill of $40 billion relating to the oil spill off the U.S. coast last year, was described as "encouraging news" by a trader.
BP will sell the unit, inherited from its merger with Arco in 2000, to a consortium in which the largest shareholders are Furukawa Sky Aluminum Corp., Sumitomo Corp. and Sumitomo Light Metal Industries Ltd.
The Louisville, Kentucky-based business, which produces aluminium sheet for U.S. beverage can makers, has been taking advantage of rising aluminum prices as a global economic recovery boosts demand.
"Although a strong business, ARCO Aluminum is clearly a nonstrategic asset," BP's Chief Executive Bob Dudley said. "Today's agreement will deliver an attractive price for the business, unlocking its value for our shareholders."
The parties expect the transaction, which is subject to regulatory approvals and closing adjustments, to be completed in the third quarter. BP said that, including the ARCO Aluminum deal, it had now entered into divestment agreements valued at over $24 billion.
Last month it announced the sale of some U.S. fuel storage and pipeline assets for $225 million and of a Colorado natural gas processing plant for $575.5 million. In February, the company also confirmed it would market some oil and gas interests in the U.K., the North Sea component of which is reportedly valued at $1 billion.
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