Alcoa Corporation Joins ASX Ahead of Alumina Acquisition
- Noel Ong
- Jul 29, 2024
- 3 min read
Updated: Mar 5
American mining giant Alcoa Corporation (ASX:AAI) has made its debut on the Australian Securities Exchange (ASX) through a dual listing of Chess Depository Interests (CDIs) - a key milestone ahead of its acquisition of Alumina Ltd.
Recently, the company confirmed that the scheme of arrangement under which Alcoa will acquire 100% of the fully paid ordinary shares in Alumina is now legally effective.
Both companies collaborated in the AWAC (Alcoa World Alumina and Chemicals) joint venture - one of the largest producers of alumina and bauxite miners globally.
Looking ahead, Alcoa’s consolidation of AWAC marks a significant union of resources and expertise within the bauxite aluminium industry.
“This transaction provides enhanced opportunities for value creation, including strengthening Alcoa’s position as one of the world’s largest bauxite and alumina producers,” said William F. Oplinger, Alcoa’s President and CEO.
What’s more, the company also trades on the New York Stock Exchange (NYSE) under the ticker code AA.
Scheme Of Implementation
Pittsburgh-based Alcoa entered into a binding scheme implementation seed with Alumina Ltd, under which it will acquire Alumina Ltd in an all-scrip, or all-stock transaction (Figure 1).
Alumina shareholders will receive 0.02854 Alcoa shares for each Alumina share, resulting in Alumina Ltd shareholders owning 31.25% of the combined entity and Alcoa shareholders owning 68.75%.
As part of the agreement, interests in Alcoa shares will be delivered in the form of CDIs, allowing Alumina shareholders to trade Alcoa common stock via CDIs on the ASX.
Importantly, Alcoa has committed to maintaining the CDI listing for at least 10 years.
Additionally, two new Australian directors from Alumina Ltd’s Board will be appointed to Alcoa’s Board of Directors upon closing the transaction.
“Entering into the Scheme Implementation Deed to acquire Alumina Limited is a milestone on our path to deliver value for both Alcoa and Alumina shareholders,” said Oplinger.
Figure 1: Key Milestone for the acquisition (Source: AWAC Website)
“Proven Operator”
Oplinger added: “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. “We believe now is the right time to consolidate ownership in AWAC, and we look forward to building on Alcoa’s success and continuing to execute our long-term strategy.”
Alcoa’s global operations
Alcoa Corporation is a global leader in the production of bauxite, alumina, and aluminium products.
Founded in 1888, the company has a rich history of innovation and sustainability in aluminium manufacturing.
Alcoa operates in a vertically integrated manner, encompassing every aspect of the aluminium production process.
This includes mining bauxite, refining it into alumina, and then smelting the alumina to produce aluminium.
The company's comprehensive approach ensures control over quality and supply chain efficiency.
The company holds direct and indirect ownership of assets in 27 locations across nine countries on six continents, enabling it to maintain a leading position in the global aluminium market (Figure 2).
Figure 2: Alcoa locations around the world (Source: Alcoa Sustainability Report)
Transaction Timeline and Future Outlook
The acquisition is anticipated to close around August 1, 2024.
This strategic move is expected to enhance Alcoa's ownership of core, tier-one assets, and drive long-term value through greater financial and operational flexibility.
Alcoa’s entry into the ASX aims to expand its investor base and leverage the Australian market’s potential.
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