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Norsk Hydro Scores Coup

Stock quotes in this article: STO , NHY , AL , AA  

The day after Statoil (STO Quote) and Norsk Hydro (NHY Quote) announced plans to merge their oil and gas activities, the deal is being widely viewed as a coup for Norsk Hydro's shareholders.

The deal is expected to unleash the "hidden value" of Norsk Hydro, whose oil and gas assets have been trading at a deep discount because they are bundled up with the value of the company's aluminum operations. Norsk Hydro is currently the world's third-largest producer of aluminum, trailing Alcoa (AA Quote) and Alcan (AL Quote).

"The deal will form a pure-play oil and gas company out of Hydro, which right now is an industrial conglomerate," says Arnstein Wigestrand, an analyst for the Scandinavian investment bank SEB Enskilda AS. ...

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