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Alcoa Finalizes Deal To Acquire Alumina Limited for $2.2 Billion
AlcoaAlcoa(US:AA) Investopediaยท2024-03-12 17:00

Core Viewpoint - Alcoa has finalized a $2.2 billion acquisition of Alumina Limited, which will result in Alumina shareholders owning a 31.25% stake in the combined entity, enhancing Alcoa's position in the aluminum market [1][2]. Group 1: Acquisition Details - The acquisition deal is valued at approximately $2.2 billion and was first announced last month [1]. - Alumina shareholders will receive 0.02854 Alcoa shares for each share of Alumina they own, translating to a 31.25% ownership in the new company [1]. - The acquisition is expected to be completed in the third quarter of 2024 [1][2]. Group 2: Historical Context and Joint Ventures - Alcoa and Alumina have been joint venture partners for decades through their collaboration in Alcoa World Alumina and Chemicals (AWAC), which operates globally in refining and smelting [2]. - The acquisition is seen as a strategic move to strengthen the balance sheet of the combined entity and support future growth options [2]. Group 3: Market Implications - Alcoa aims to reduce reliance on external suppliers through this acquisition, positioning itself to meet anticipated increased demand for aluminum, particularly from the renewable energy and electric vehicle sectors [3]. - Following the announcement, Alcoa's stock decreased by approximately 4% to $29.44, while Alumina's stock increased by 3.5% to $3.23 [3].