Aluminium Bahrain has agreed to buy Europe’s biggest smelter in northern France, pledging to protect jobs at the site once owned by UK metals tycoon Sanjeev Gupta and signalling that it may allow the French government to take a stake.
The European metals sector has been roiled by cheaper Chinese competition and tariff disputes between Europe and the US, raising fears for its prospects even as the EU brings in a carbon border tax to help fend off competition.
Aluminium Bahrain, which already owns the world’s biggest smelter outside China and is majority owned by the Gulf island nation’s sovereign wealth fund Mumtalakat, will buy Aluminium Dunkerque from American Industrial Partners, its owner since 2021.
The deal, terms of which have not been disclosed, is not finalised and could yet involve state-owned investment bank Bpifrance taking a stake, Alba and Aluminium Dunkerque said on Monday.
“Alba is open to opening up the capital to Bpifrance . . . to aid the long-term development of Aluminium Dunkerque,” the companies said in a joint statement, adding that talks were ongoing.
The French economy ministry said it would be “particularly vigilant over preserving jobs and strategic industrial capacities” at the site, which employs 750 people and produces 300,000 tonnes of aluminium a year.
People close to the deal said the priority after several years of uncertainty for the smelter was to find a long-term owner.
The site is “ideally positioned to make the most of structural supply deficits in Europe”, the companies said, meaning more European aluminium needs could be filled locally. Demand for “aluminium produced in a sustainable way” should also help the business, they added.
AIP acquired Aluminium Dunkerque from beleaguered metals magnate Sanjeev Gupta, and the private equity group cut debt and turned earnings around. Net profit rose from €49mn in 2021 to €186mn in 2024, according to the latest available accounts.
Pressure from Chinese competition and the huge investment costs needed to make steel and aluminium production cleaner in Europe have pushed some manufacturers in the region to the brink.
Governments are trying to mitigate any fallout for jobs and preserve local industries, all the more so amid an EU drive spearheaded by France to boost homegrown manufacturing in the face of Chinese imports.
The Aluminium Dunkerque takeover comes as unions fret over the future of ArcelorMittal’s activities in northern France, despite the company’s pledges to overhaul its steel site in Dunkirk with an electric arc furnace and invest in activities there.
The French government is also seeking damages from UK private equity firm Greybull, alleging it was responsible for more than 500 jobs lost at the Novasco steel site it formerly owned.
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