Alcoa to buy Australian partner Alumina in $2.2 billion all-stock deal

[Pelican Press 0]

Alcoa to buy *********** partner Alumina in $2.2 billion all-stock deal

The Alcoa Corp. Kwinana Alumina Refinery in Kwinana, Australia, on Wednesday, Feb. 28, 2024. U.S. aluminum producer Alcoa made a $2.2 billion offer to acquire its *********** ******-venture partner Alumina Ltd. to consolidate ownership of key upstream assets with long-term demand for the metal forecast to rise. 

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Alcoa will buy Alumina in an all-stock deal that values the *********** firm at $2.2 billion and make the U.S. company one of the world’s largest producers of alumina and bauxite.

Shares of Alumina rose as much as 10.4% after Alcoa announced the deal on Monday, hitting their highest since August 2023. Alcoa shares gained 2.1% to $30.5 apiece.

Alcoa’s push for acquiring its ****** venture partner can be seen as a gamble for metals which will be an important part of the transition to cleaner sources of energy.

Buying Alumina gives Alcoa full control of their ****** venture, which is one of the world’s largest producers of the semi-processed form of aluminum. Aluminum is used to produce renewable infrastructure and electric vehicles.

The global mining sector has seen a recent slew of merger and acquisitions despite rising concerns around the economic

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of one of the world’s largest metals buyer, China, and slowing EV sales in the ******* States.

“It could be a win-win for both companies,” Tim Waterer, chief market analyst at trading firm KCM Trade, said.

“The takeover offer could be viewed as a vote of confidence in the resources space despite a cloudy growth

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for the sector.”

The buyout follows ******* States Steel’s $14.9 billion deal to buy Japan’s Nippon Steel and Newmont’s $15 billion acquisition of Aussie gold miner Newcrest.

Post the deal, Alumina shareholders will own about 31.6% of the merged entity, while Alcoa shareholders will hold 68.4%.

Alumina’s board, including Managing Director and CEO, recommended shareholders vote for the deal, in the absence of a superior proposal.

The deal comes months after Alcoa faced operational and permit-related problems for its bauxite business in Australia. It also disclosed in January plans to halt production at the Kwinana alumina plant in Western Australia in a move to control costs.

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Metal manufacturing,Aluminum mining and refining,Aluminum manufacturing,Sales,Electric vehicle manufacturing,Electric vehicles,Transportation and infrastructure organizations,Alternative and sustainable energy,Energy policy,Renewable power generation,Australia,Metal mining,US STEEL DRN,Metal Commodities,Mergers and acquisitions,Newmont Corporation,Nippon Steel Corp,Alumina Ltd,Alcoa Corp,business news
#Alcoa #buy #*********** #partner #Alumina #billion #allstock #deal

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