Emirates Global Aluminium acquires a stake in Italy’s Eco Green, staking a position in Europe’s scrap economy

Emirates Global Aluminium (EGA) is lining up an 80% acquisition of Italy’s Eco Green in a move that would be its third major outbound acquisition in two years, and aims to bring its global recycling capacity to 400k tonnes per year, according to a statement. The transaction value was not disclosed.

The target: Eco Green is an aluminum recycling firm that sources and processes over 70k tonnes of aluminum scrap annually into usable metal. It is owned by Italy’s Scappini family, who will retain their 20% holding post-acquisition.

What’s next? The transaction, which follows the aluminum-maker’s buyout of Germany’s Leichtmetall in May 2024 and its acquisition of US-based Spectro Alloys in September of the same year, is still subject to regulatory approval. EGA plans to fold the firm into its RevivAL brand.

ADVISORS- On the sell-side, Eco Green and the Scappini family were advised by Lucio Leoni and Legance, with support from Riccardo Paganin, Carlotta Giani, and Emilio De Niro.

Our take

Could this be a contingency plan? By locking in scrap supply and a network of over 350 suppliers in Europe, EGA is building a buffer to keep serving auto and construction clients while its core production at home is impaired. With Al Taweelah still under force majeure and shipping through the Strait of Hormuz carrying real risk, outbound M&A can start to look more like a necessity.

REMEMBER- The March strikes on EGA’s facility took a significant chunk of regional primary capacity offline. Al Taweelah produced 1.6 mn tons last year. Recovery timelines are stretching out toward a year for a full normalization, and more contract cancellations could be in the works. Prices reacted accordingly, with LME aluminum spiking sharply as buyers scrambled for available metal already in transit or sitting in overseas warehouses.