PE firm AIP said to explore sale of biggest EU aluminum smelter

US private equity firm American Industrial Partners LP is considering a sale of Aluminium Dunkerque Industries France SAS, which runs the largest aluminum smelter in the European Union, according to people familiar with the matter.

AIP took control of Aluminium Dunkerque in 2021, after buying several hundred million dollars of debt linked to the smelter, and using it to seize ownership from Sanjeev Gupta’s beleaguered GFG Alliance. At the time, surging energy prices were plunging aluminum plants across Europe into crisis.

The firm is now exploring a possible sale, following on from a robust financial performance over recent months, and the signing of a long-term power agreement with Electricite de France SA earlier this year, said the people, who asked not to be identified discussing private negotiations.

Companies including Rio Tinto Group, Glencore Plc, and Metlen Energy and Metals Plc, have already submitted non-binding offers for the French company, some of the people said.

AIP, Rio Tinto, Glencore, and Metlen declined to comment.

The agreement with EDF covers a substantial proportion of the plant’s electricity needs for a duration of 10 years, starting from Jan. 1, 2026. Aluminium Dunkerque will be able to supplement its electricity supply with nuclear-origin guarantees, thus benefiting from low-carbon electricity. The plant has annual production of 300,000 metric tons of aluminum and turnover of over €800 million ($921 million), according to its website.

The smelter specializes in the production of aluminum slabs and alloys in a variety of applications in the automotive, transport and packaging sectors. Demand for those products has suffered during a downturn in regional industrial activity, but the global outlook for aluminum has been bolstered by supply caps in China, with benchmark prices rising more than 10% on the London Metal Exchange this year.

AIP, which manages more than $16 billion of private equity capital, is also considering listing Aluminium Dunkerque as an alternative to a sale, with Euronext a possible venue, one of the people said. Goldman Sachs Group Inc., Societe Generale SA and Messier & Associes are acting as advisers to AIP on the possible options, two of the people said.

Goldman Sachs and Messier & Associes declined to comment. A representative for Societe Generale did not immediately respond to a request for comment.

(By Paul Tugwell, Irene García Pérez and Thomas Biesheuvel)