• Transaction would further enhance Alcoa’s position as of one of the world’s largest bauxite and alumina producers with increased ownership of core, tier-1 assets
  • Transaction would provide Alumina Limited shareholders the opportunity to participate in the upside potential of a stronger, better-capitalized company with a larger, more diversified portfolio
  • Transaction would result in significant and long-term value creation for both companies’ shareholders from greater operational flexibility
  • Alumina Limited’s largest holder, Allan Gray Australia, has entered into an agreement with Alcoa which gives Alcoa the right to acquire up to 19.9% of Alumina Limited’s issued share capital
  • Investor conference call scheduled for today, February 25, 2024 at 6:00 p.m. ET / February 26, 2024 at 10:00 a.m. AEDT

Alcoa have announced that it has entered into an agreement with Alumina Limited on terms and process for the acquisition of Alumina Limited, subject to entry into a scheme implementation agreement.

Alcoa and Alumina Limited have announced that they have entered into an exclusivity and transaction process deed (“Process Deed”), and the Alumina Limited Board of Directors has confirmed that, subject to entry into a scheme implementation agreement, it intends to recommend the transaction to Alumina Limited shareholders. Under the all-scrip, or all-stock, transaction, Alumina Limited shareholders would receive consideration of 0.02854 Alcoa shares for each Alumina Limited share (the “Agreed Ratio”). Based on Alcoa’s closing share price as of February 23, 2024, the Agreed Ratio implies an equity value of approximately $2.2 billion for Alumina Limited.

The Alumina Limited Board of Directors intends to recommend the Agreed Ratio in the absence of a superior proposal and subject to an independent expert concluding (and continuing to conclude) that the transaction is in the best interests of Alumina Limited shareholders.

Under the Process Deed, Alcoa and Alumina Limited intend to finalise and enter into a scheme implementation agreement for the all-scrip transaction (the “Agreement”). Upon completion of the Agreement, Alumina Limited shareholders would own 31.25 percent, and Alcoa shareholders would own 68.75 percent of the combined company.

Alcoa is the sole operator of Alcoa World Alumina and Chemicals (AWAC), a joint venture (“JV”) with Alumina Limited. AWAC consists of a number of affiliated entities that own, operate or have an interest in bauxite mines and alumina refineries in Australia, Brazil, Spain, Saudi Arabia and Guinea. AWAC also has a 55 percent interest in an aluminum smelter in Victoria, Australia. Alcoa owns 60 percent and Alumina Limited owns 40 percent of the AWAC entities, respectively, directly, or indirectly.

The Agreement would increase Alcoa’s economic interest in its core business and simplify governance by acquiring the minority partner in its AWAC JV, resulting in greater operational flexibility and strategic optionality. It would also allow Alumina Limited shareholders to participate in the upside potential of a stronger, better-capitalised company with a larger and more diversified portfolio while offering exposure to Alcoa’s upstream aluminum business.

“We are pleased to have entered into the transaction process and exclusivity deed to finalise 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. “Alcoa has been a proven operator of AWAC, and we recognise 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. 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.”

Mr. Oplinger continued, “This acquisition would build on our commitment to Western Australia, and provides significant benefits to employees, customers, host communities, and others who rely on the continuing success of our global business.”