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Orkla Sells Aluminum Division And Offers Special Dividend

Jul. 11, 2017 3:57 PM ETOrkla ASA (ORKLY)4 Comments
Holmes Osborne profile picture
Holmes Osborne


  • Orkla sells off its aluminum division for $3.2 billion.
  • Special dividend of 5 krone.
  • The company will continue to expand into foods.

Orkla (OTCPK:ORKLY) has finally done something that we shareholders have been waiting for a long time-sold off its aluminum division and has begun paying a special dividend. The company has $3.2 billion in cash to reinvest into new, high profit margin, food companies.

The company has 1.02 billion shares, the stock trades for 85.86 Norwegian krone, and the market cap is 87.6 billion krone ($10.4 billion). The dividend is 2.6 krone and the dividend yield is 3%. Earnings per share are 4.23 krone and the price to earnings ratio is 20.53. It takes 8.33 krone to buy one dollar. Orkla reports second quarter results on July 14.

Sapa produces a product known as "extruded aluminum". Extruded aluminum is the manufacturing of aluminum products. The deal calls for Hydro to pay Orkla 27 billion krone ($3.24 billion). Orkla made 5 billion krone profit ($600 million) on the deal. Also, it's not taxable. My guess is that an American company would pay a tax on a transaction of this nature.

The best part of the deal is that shareholders will receive a 5 krone special dividend. So this year, we receive 7.6 krone. That's a yield of 8.85% this year! Unfortunately, we'll pay quite a bit of taxes to the Norwegian government-even in IRAs. The U.S. does not have a dividend treaty with Norway. In February 2016, I wrote, "If history repeats itself, there will be a special dividend in two or three years".

Orkla was in the conglomerate business but has been shifting into foods for the last few years. It was in aluminum (just sold), paint (still is), hydroelectric power (still owns), and extruded aluminum in Sweden (spun off). Of course the crown jewel is the foods division. It's sold and bought many companies. In 2004, the company sold off an interest in Carlsberg beer (

This article was written by

Holmes Osborne profile picture
Holmes Osborne is the principal of Osborne Global Investments. Holmes holds the Chartered Financial Analyst designation and a degree in finance from Syracuse University. He has been featured in the Wall Street Journal, Fortune Magazine, and Investors' Business Daily. Holmes has written financial columns for Seeking Alpha, the Motley Fool, theStreet.com, Gurufous, and several other publications.  Osborne Global focuses on fixed income, value investing, and international stocks.  Holmes is the father to two daughters, Adelaide and Emily.

Analyst’s Disclosure: I am/we are long ORKLY. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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