A German company and a state-run French utility have agreed to take over two unprofitable aluminum facilities in France from Anglo-Australian mining companyRio Tinto. German aluminum group Trimet AG said Saturday that it would acquire a 65% interest in the businesses—a smelter in the French Alps and a transformation unit in southern France—while utility Electricit de France would buy the remaining 35%. They didn't disclose the price of the transaction.
The companies said they had committed to invest €200 million, or about $250 million, to modernize the facilities, which Rio Tinto had threatened to shut down.
The French government, which helped broker the agreement, hailed the deal as evidence that France remains attractive to investors and has an industrial future.
"This operation preserves the capacity to produce aluminum in France, which is crucial for the country and its energy industry," said French Prime Minister Jean-Marc Ayrault, who attended a signing ceremony at the Alpine factory on Saturday.
The French government is struggling to rekindle its economy, which tipped into recession at the turn of the year. The unemployment rate rose to a 15-year high of 10.9%.
Mr. Ayrault said France's state-run investment bank, BPI, might take a minority stake in the aluminum venture at a later stage.
The two factories were once part of French aluminum company Pechiney—which was bought by Canada's Alcan in 2003. Alcan was taken over by Rio Tinto in 2007.
In recent months, Rio Tinto had said the facilities had become less competitive and should be closed or sold.
"The sale of these facilities underscores our strategy to streamline Rio Tinto Alcan, through the divestment of noncore assets, so that it is focused only on our lowest-cost businesses," Jacynthe C?té, the chief executive of Rio Tinto's aluminum unit, said in a written statement.
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