Constellium reaches agreement to acquire Wise Metals

• $1.4 billion acquisition - $455 million in cash and $945 million in assumption of debt
• Plans to increase Wise’s current 450 kt of hot mill capacity to over 700 kt and build 200 kt of dedicated BiW finishing capacity
• Up to $750 million investment by Constellium expected by 2022 to support capacity increase
• Wise’s EBITDA expected to quadruple from 2013 level after full ramp-up of Body-in-White production and completion of capacity expansion
• Expands scale and global reach of Constellium’s operations and business portfolio

Constellium N.V. today announced that it has signed a definitive agreement to acquire Wise Metals Intermediate Holdings LLC (“Wise”), a private aluminum sheet producer located in Muscle Shoals, Alabama. Under the terms of the transaction, Constellium will purchase Wise for $1.4 billion, consisting of $455 million in cash and $945 million in the assumption of Wise’s existing debt. The transaction, which was unanimously approved by the Constellium’s Board of Directors, remains subject to customary closing conditions and regulatory approvals.

Expanding Constellium’s Body-in-White capacity

The acquisition of Wise – which has the widest hot strip mill in North America – will provide Constellium immediate access to 450 kilo metric tons (kt) of hot mill capacity. In parallel, Constellium intends to invest up to $750 million by 2022 to increase Wise’s current hot mill capacity to over 700 kt and build 200 kt of dedicated BiW finishing capacity to serve the rapidly growing automotive market. Significantly accelerating Constellium’s involvement in the North American Body-in-White (BiW) market, investments are expected to be funded by operating cash flow generated by Wise and existing Constellium’s resources.

Constellium estimates that the North American market for BiW aluminum rolled products could grow from less than 100 kt in 2012 to approximately 2.000 kt by 2025. This transaction is strategically aligned with Constellium’s objective of continuing to grow in this high value-added market, as evidenced by its leadership position in the European automotive market as well as its recent investments in BiW capacity in the U.S. and Europe.

“The acquisition of Wise is transformative in many ways for Constellium,” said Pierre Vareille, Constellium's Chief Executive Officer. “Wise is a natural fit with our business portfolio. The combination of their strong operating capabilities with our major position in the BiW and can sheet markets in Europe will create an outstanding platform to serve our customers. With three core businesses – aerospace, automotive and packaging – and a more balanced international dimension, Constellium expects to increase its earnings power and create sustainable value for customers and shareholders.”

"I'm extremely proud of what we built at Wise over the last 15 years. Our people, machinery and culture are world class. I'm excited that we have a new steward for Wise who shares our views and has the technological and financial ability to take Wise to the next level. I will be watching with excitement as Wise continues to evolve in a profound way into the future,” stated David F. D’Addario, Chairman and Chief Executive Officer of Wise Metals.

Expanding Constellium’s global reach and creating value

The transaction also strengthens Constellium’s global footprint and offerings by increasing the Company’s exposure to the North American market. Wise’s growing can sheet business in the U.S. will supplement Constellium’s leading position in Europe and provide stability through long-term contracts with its global beverage can customers. Post-acquisition, Constellium expects to benefit from increased product development resources, improved competitive position, enhanced global reach and greater operational flexibility.

The acquisition is expected to be quickly accretive to earnings. Wise’s 2013 EBITDA level is expected to quadruple once facility upgrades are completed, driven by the addition of BiW production.

The transaction is expected to be funded with a mix of debt and equity to preserve Constellium’s strong capital structure and liquidity. Deutsche Bank has provided a fully committed bridge facility to finance the deal.

Deutsche Bank Securities Inc. is serving as financial advisor to Constellium, and Wachtell, Lipton, Rosen & Katz is serving as its legal advisor. BofA Merrill Lynch is serving as financial advisor to Wise Metals and Winston & Strawn LLP is serving as its legal advisor.