December 10, 2005 — Meridian Technologies Inc. is the latest metalcasting organization to be drawn into the world of private equity. Estatia A.G., a Swiss holding company controlled by Jostein Eikeland, a Norwegian, is acquiring the Canada-based magnesium diecaster from its two owners — Teksid S.p.A. And Norsk Hydro A.S.A. — for an estimated $174 million.

The purchase follows that of another Canadian light-metal diecaster, E.D.C. Inc. has agreed to a takeover by Switzerland's George Fischer A.G.

Claiming to be the world's largest marketshare for magnesium diecastings, Meridian supplies most of the top automakers in North America and Europe: BMW, DaimlerChrysler, Fiat, Ford, General Motors, LandRover, Opel, and Volkswagen.

The move further distances Hydro' from the magnesium market, and from the automotive castings sector. Last fall it decided to close its magnesium smelter in Quebec, and last week it agreed to sell its aluminum automotive casting operations to Nemak.

Eiklund, however, says magnesium "… is set to be the metal of our times. It is far lighter than steel and aluminum, with the best strength to weight ratio of all three metals. With high oil prices set to remain, magnesium can significantly reduce the weight of, and hence improve the fuel economy of vehicles.

"With a cost advantage over aluminum,” Eiklund continued, “magnesium use in the automotive industry continues to grow over 10% per year. This offers a tremendous opportunity for us to build a global manufacturing base and brand that will be synonymous with the adoption of this metal throughout components manufacturing."

Eiklund already holds a 28% stake in a Swedish diecaster, Tonsberg Magnesium Group International AB.

Also in the investor group is Landsbank of Iceland, which is also the lead financial advisor to the buyers with BZ Bank and Straumur Burdaras as co-advisors, The debt financing will be underwritten by GE Capital Commercial Finance and Lansbanki.