Norwegian aluminium producer Norsk Hydro has signed an agreement to terminate its previously announced $345m deal to acquire Rio Tinto‘s aluminium assets in Europe.

As per the binding offer made in February this year, the company proposed to acquire Rio Tinto’s ISAL aluminium smelter in Iceland, and its 53.3% share in Dutch anode facility Aluminium & Chemie Rotterdam (Aluchemie).

“Hydro requested to terminate the transaction and the parties have signed a termination agreement.”

The annulled transaction also included the acquisition of Rio Tinto’s 50% share in aluminium fluoride plant Alufluor in Sweden.

Through the acquisition, Hydro intended to bolster its position as an extrusion ingot supplier in Europe and enhance its share of production that is based on renewable energy to more than 70%.

Following the binding offer, Hydro held consultations with representatives from Rio Tinto in France and the Netherlands and signed a sale and purchase agreement (SPA) on 08 June.

Subject to certain conditions, including approval by competition authorities and Icelandic governmental authorities, the acquisition was initially expected to be concluded in the second quarter of this year.

The transaction still awaits an approval from the European Commission (EC), which according to Hydro has taken longer time than expected.

In a statement, Hydro said: “After considering alternative timelines, outcomes and developments, Hydro requested to terminate the transaction and the parties have signed a termination agreement. Hydro has withdrawn its EC competition filing. Hydro will continue to own 46.7% in Aluchemie.”

Rio Tinto’s ISAL smelter is located in Hafnarjordur, Iceland, and has an environmental management system.

The smelter, which was inaugurated in 1969, has a capacity of 205,000t of aluminium per year.