US acquisition to strengthen Gränges position and create opportunities for growth

The US Bankruptcy Court has approved Gränges acquisition of Noranda Aluminum
Holding Corporation’s (“Noranda”) downstream aluminium rolling business in the
United States. When completed the transaction will double Gränges sales volume
and strengthen its position in North America. Further, Gränges will add a number
of strategic and attractive market segments in rolled aluminium. Through the
acquisition, Gränges’ business is significantly strengthened, creating very good
opportunities for continued profitable growth. The transaction is expected to
close on 22 August, 2016.

Summary

  · Gränges will acquire the business and related assets for 2.8 billion SEK,
corresponding to an EV/EBITDA multiple of 6.2x pro-forma 2015 adjusted EBITDA
  · Noranda downstream’s stable and profitable operations complement Gränges’
current business
  · Integrated production chain in North America with close geographic proximity
to customers
  · Modern and cost effective manufacturing with no immediate investment needs
  · Access to attractive customer base in stationary heat exchangers (HVAC&R)
  · Transaction expected to be earnings per share accretive year one
  · Net debt expected to reach financial target of 1-2 times EBITDA in 2018

”This is a strategically important transaction for us, meaning a new chapter in
the history of Gränges is written. Together we become a global player in our
chosen key areas and significantly strengthen our market offering. At the same
time, we acquire the platform we have been seeking to expand Gränges in North
America. Through this transaction we now see large opportunities to further
build our business and market share in the coming years”, says Gränges’ CEO
Johan Menckel.

”We are satisfied to have the opportunity to execute this transaction at an
attractive valuation. We will remain financially strong after the transaction,
as we expect our gearing to be in line with our long-term financial targets
already in 2018. We believe this is a transaction that will benefit our
employees as well as our customers and shareholders”, continues Gränges’ CEO
Johan Menckel.

The transaction

On June 14, 2016 Gränges announced that the company reached an agreement with
Noranda to acquire its downstream aluminum rolling business in the United States
as part of a Chapter 11 reorganization of Noranda. Gränges emerged as the winner
of a subsequent auction valuing the business and its related assets to 324.2
million USD, corresponding to 2.8 billion SEK. On 17 August, 2016 Gränges
received final approval as a buyer by the US Bankruptcy Court.

About the acquired business

Noranda’s downstream aluminium rolling business manufactures aluminium products
for customers in North America, including manufacturers of stationery air
conditioners, transformers, food packaging and other adjacent market segments.
The company is a major supplier in each of these areas.

The company’s rolling mills are well located in the Southeast United States. The
rolling mill in Huntingdon, Tennessee, is one of the most modern and cost
effective light gauge mills in North America and accounts for about 80% of the
sales volume. In Salisbury, North Carolina, the company has a smaller rolling
mill and in Newport, Arkansas, the company has a surface treatment plant. Total
capacity in the acquired units amounts to approximately 180 ktonnes and number
of employees amount to approximately 550.

Legally, the acquired business will be part of Gränges Americas Inc., a wholly
owned subsidiary of Gränges AB

Rationale for the transaction

The acquisition delivers on Gränges goal to be a global supplier with a more
balanced footprint by firmly establishing the company in North America and as US
market leader in the strategic HVAC&R market. In addition, the acquisition
expands Gränges’s offering into attractive adjacent aluminium rolled product
areas.

Through the transaction, Gränges will more than double its sales volume. The new
Gränges will have a sales volume of approximately 336 ktonnes, of which 59% goes
to customers in Americas, 22% to Asia and 19% to Europe.

The acquisition provides several strategic advantages for Gränges. The acquired
assets include a complete production chain with no anticipated immediate major
investment needs. The organization is very experienced, the customer
relationships are longstanding and the business exhibits several years of stable
profitability. Geographic proximity to a majority of customers is another
strategic advantage.

Pro-forma

Gränges sales volume, including the acquired business, would have reached 336
ktonnes in 2015. Pro-forma net sales would have reached 10.1 billion SEK (1.2
billion USD) and the adjusted EBITDA, calculated based on Gränges group
assumptions, would have reached 1.2 billion SEK (141 million USD).

Key financials for 2015 (pro forma)

+---------------------+-------+-----------------+------+
|SEK million          |Gränges|Acquired business|Total |
+---------------------+-------+-----------------+------+
|Sales volume, ktonnes|164    |172              |336   |
+---------------------+-------+-----------------+------+
|Net sales            |5 494  |4 650            |10 145|
+---------------------+-------+-----------------+------+
|EBITDA               |749    |438              |1 187 |
+---------------------+-------+-----------------+------+

This information is only intended to show approximate effects of the
acquisition, and do not include any other effects of the transaction including
synergies, integration costs or other transaction related items.

The acquisition is expected to be accretive to Gränges earnings per share in the
first year.

Gränges net debt increases as a result of the acquisition. As of June 30, 2015,
Gränges’ pro forma net debt would have amounted to SEK 3.1 billion,
corresponding to 2.5 times EBITDA. The gearing is expected to gradually reduce
and during 2018 it is expected to be in line with Gränges’ long-term financial
targets of 1-2 times EBITDA.

Financing

Gränges has secured bank loan financing from Svenska Handelsbanken and Danske
Bank to finance the transaction. The loan financing has been secured on
customary corporate terms. The company’s interest costs are expected to increase
by SEK 20 million per quarter based on current base rates. No rights issue is
currently planned as a consequence of the acquisition.

Webcasted conference call

Gränges will host a webcasted conference call tomorrow, 18 August, 2016, at CET
10.00 a.m., with CEO Johan Menckel and CFO Oskar Hellström. The webcast can be
accessed on www.granges.com/investors. The presentation will be in English. To
take part in the telephone conference, please call +46 856642661 (Sweden), +44
2031940544 (United Kingdom) or

+1 8552692604 (USA). Call a few minutes before the conference call begins.

For further information, please contact:

Pernilla Grennfelt, Director Communications and IR of Gränges
pernilla.grennfelt@granges.com, tel: +46 702 90 99 55

The information in this press release is such that Gränges must disclose
pursuant to the EU Market Abuse Regulation. The information was submitted for
publication, through the agency of the contact person set out above, on
Wednesday, 17 August, 2016, at 17.45 CET.

About Gränges
Gränges is a leading global supplier of rolled products for brazed aluminium
heat exchangers. The company develops, produces and markets advanced materials
that enhance efficiency in the customer manufacturing process and the
performance of the final products; brazed heat exchangers. The company’s
geographical markets are Europe, Asia and the Americas. Its production
facilities are located in Finspång, Sweden, and Shanghai, China, and have a
combined annual capacity of 220,000 metric tonnes. Gränges has some 950
employees and net sales in 2015 totalled SEK 5,494 million. Its shares have been
listed on Nasdaq Stockholm since October 2014. More information on Gränges is
available at granges.com.