No buyers stepped forward to snatch up Arconic Inc. amidst liability concerns about a cladding component manufactured by the US company and used on the London high-rise where a massive fire killed more than 70 people in 2017.
Pittsburgh-based Arconic, formerly Alcoa, produced the composite panels of polyethylene-filled aluminum for a fabricator supplying cladding for the renovation of the 24-story tower. The panels were installed with combustible polyisocyanurate (PIR) insulation.
The external cladding and insulation were blamed for the fast-spreading flames that tore through the building after a refrigerator malfunctioned in an apartment.
Arconic has not been accused of any wrongdoing for its connection to the fire, but the investigation is ongoing and it put a snag in potential deals.
Arconic had been in talks with US private equity firms about a $10bn (€8.8bn)-plus takeover of the company, which also manufactures parts for the aerospace and automotive markets, as part of a strategy and portfolio review, according to Chairman John Plant.
"However, we did not receive a proposal for a full-company transaction that we believe would be in the best interests of Arconic's shareholders and other stakeholders," Plant said in a 22 Jan. statement.
Apollo Global Management reportedly was the front runner, but talks fell through with the firm and all potential buyers. A major issue involved protecting any buyer from liabilities related to Grenfell.
Arconic's board now has decided against pursuing a sale of the company.
"We will continue with the previously announced sale process for our building and construction systems business," Plant said. "More broadly, we remain strongly focused on creating value for Arconic shareholders, through continued operational improvements and through other potential initiatives, which we have identified in our strategic review."
Arconic stopped selling the product used on the Grenfell Tower — called Reynobond PE — for high-rise applications two weeks after the deadly inferno. However, fire tests going back to 2014 indicate the manufacturer knew the panels failed to meet the safety standards it claimed, the BBC has reported, citing internal Arconic reports and correspondence.
In addition, a new report published in the Journal for Hazardous Materials says the combination of PE-filled aluminum composite panels with PIR insulation results in the highest flammability and most toxic smoke of all products available.
Researchers at the University of Central Lancashire concluded that the panels used on the Grenfell Tower were 55 times more flammable than other products on the market. Also, the smoke released from burning PIR insulation is 15 times more toxic than fire-safe insulation products, according to their findings.
"Our research demonstrates the need for tighter regulations around flammable and toxic building products, especially when used on towers or buildings with vulnerable occupants, as this could put lives at serious risk," study author Richard Hull, a professor of chemistry and fire science, told the journal.
"The tests that we have carried out provide crucial evidence around the large differences in the fire safety of construction products used on U.K. buildings, and have clear implications for regulators to ensure the fire safety of occupants living in these buildings."
But the trade association PU Europe cited the same study as it called for a cautious approach to any action on polyurethane building materials.
Arnaud Duvielguerbigny, general secretary of Brussels-based PU Europe, stressed that a public investigation led by retired Judge Martin Moore-Blick and London's Metropolitan Police's investigation to see if the fire is a criminal matter have unearthed a number of structural and organisational factors that could have significantly contributed to the fire and loss of life.
"It's wrong to focus on a component of a building," Duvielguerbigny said.
Duvielguerbigny said it is important to "look at the end-use application, from design to actual application of the system. The research paper does, however, go into that a little. It states: 'It is arguable whether the refurbished facade was actually compliant' in its introduction. But it does not address this aspect later."
The paper is to be published in the April issue of the Journal of Hazardous Materials.
Simon Robinson, editor of Urethanes Technology International, contributed to this story.