Vale Cutting Aluminum Stake

Vale is preparing to sell a stake of as much as 12% in Norwegian aluminum producer Norsk Hydro, it says, which could fetch more than $1bn. Vale is selling up to 246m shares, including an overallotment option, through an accelerated bookbuilding process launched Monday. The block of shares would be worth NOK6.63bn ($1.08bn) at Monday’s NOK26.96 closing price. Morgan Stanley and DNB are slated to manage the transaction, according to a person familiar with it. The sale could take Vale’s stake in Norsk to 201m shares, or 9.7%, and is part of a divestiture plan to help the Brazilian miner cope with lower commodity prices that have meant leaner profits. In September, it sold stakes in its VLI cargo unit to a Caixa Economica Federal fund and Japan’s Mitsui for a total of BRL2.71bn ($1.2bn). This followed $1.47bn of divestments in 2012. Vale’s 22% position in Norsk Hydro comes from a $5.27bn 2011 sale of its bauxite and aluminum assets in Brazil to Norsk.