Aussie producer, Alumina Limited, is to be acquired by American aluminium giant, Alcoa, in an all-stock transaction valued at a whopping US$2.2B.
The acquisition aligns with the initial proposal made by Alcoa on 25 February 2024. During a briefing with analysts, Alcoa’s CEO, William Oplinger, highlighted that the move is expected to cut Alumina’s annual overhead expenses by US$7.93M.
Alumina shareholders are set to receive 0.02854 shares of Alcoa for each share of Alumina they possess. This exchange rate equates to A$1.15 per Alumina share, calculated based on the closing price of Alcoa shares on 23 February 2024.
“We are pleased to have entered into the transaction process and exclusivity deed to finalize the terms of the transaction, which will provide significant and long-term benefits to both Alcoa and Alumina Limited shareholders,” said William F. Oplinger, Alcoa’s president and CEO.
Following the completion of the acquisition, shareholders of Alumina as of the record date will hold approximately 31.25% of the combined company, with the remaining 68.4% being retained by current Alcoa shareholders.
The directors of Alumina, including the managing director and CEO, have unanimously advised shareholders to endorse the transaction unless a more advantageous offer emerges.
The principal holding of Alumina is a 40% interest in the Alcoa World Alumina and Chemicals joint venture. This agreement, overseen by Alcoa, engages in bauxite mining, alumina refining, and aluminium smelting operations spanning Australia, Brazil, Spain, Saudi Arabia, and Guinea.
“Alcoa has been a proven operator of AWAC, and we recognize the value creation opportunities possible under a simplified ownership structure, including the ability to implement AWAC’s operational and strategic decisions on an accelerated basis.” Added Mr. Oplinger. “We believe now is the right time to consolidate ownership in AWAC and look forward to working closely with the Alumina Limited team to consummate a transaction that will better position Alcoa to execute on our long-term growth strategy.”
