Alcoa Finalizes Deal To Acquire Alumina Limited for $2.2 Billion

Alcoa (AA), one of the world’s largest aluminum producers, has finalized a deal to acquire Alumina Limited (AWCMY) for an estimated $2.2 billion.

The deal, first announced last month, will give Alumina shareholders 0.02854 Alcoa shares for each share of Alumina they own, giving Alumina shareholders a 31.25% ownership stake in the newly combined company.

Pittsburgh-based Alcoa has worked with Alumina, an Australian company, for decades, as joint venture partners in a refining and smelting business that operates in a number of countries, Alcoa World Alumina and Chemicals (AWAC).

Alcoa said the acquisition is set to be completed in the third quarter of 2024, and Alumina shareholders will receive their Alcoa shares in the form of CHESS Depositary Interests (CDI), which will allow the shareholders to trade Alcoa shares on the Australian Stock Exchange for at least 10 years.

“We believe the time is right to combine our two companies,” Alumina Chairman Peter Day said. “The combined entity will have a larger and stronger balance sheet, and be better able to fund the current portfolio restructuring actions in AWAC, as well as realising potential growth options in the medium to longer term.”

Alumina had rejected a number of offers from Alcoa before its board was persuaded to support the deal that was announced late Monday.

Alcoa has said the acquisition will make it less reliant on other suppliers, and put the company in a better position to handle what it hopes will be increased demand for aluminum as the renewable energy and electric vehicle sectors grow in the U.S. and abroad.

Alcoa’s stock was down about 4% to $29.44 in early afternoon trading Tuesday, while Alumina’s rose 3.5% at $3.23.