Alcoa Corporation Announces Stockholder Approval in Connection with the Proposed Acquisition of Alumina Limited
Alcoa (NYSE: AA) announced that its stockholders have overwhelmingly approved the issuance of shares for the proposed acquisition of Alumina Approximately 99% of Alcoa shares present at the Special Meeting voted in favor of the transaction. This acquisition is expected to strengthen Alcoa's position as one of the world's largest bauxite and alumina producers, increasing ownership of core, tier-one assets. The deal aims to create significant long-term value through greater financial and operational flexibility.
Alumina shareholders will vote on the scheme on July 18, 2024, followed by a Federal Court of Australia hearing on July 22, 2024. The transaction is anticipated to close around August 1, 2024. J.P. Morgan Securities and UBS Investment Bank are acting as financial advisors to Alcoa, with Ashurst and Davis Polk & Wardwell LLP serving as legal counsel.
- 99% of Alcoa shares voted in favor of the acquisition
- Acquisition expected to strengthen Alcoa's position as a leading bauxite and alumina producer
- Increased ownership of core, tier-one assets
- Potential for significant long-term value creation
- Greater financial and operational flexibility anticipated
- None.
Insights
The approval by Alcoa's stockholders for the acquisition of Alumina Limited is a notable milestone. This acquisition, once completed, will likely create significant long-term value by expanding Alcoa's bauxite and alumina production capacity. As these materials are fundamental in aluminum production, Alcoa stands to benefit from greater operational efficiencies and an enhanced position in the supply chain. Additionally, the near-unanimous approval (approximately
In the short term, the market may react positively to the consolidation of assets, as it could lead to cost synergies and improved financial flexibility. However, investors should also be mindful of integration risks and potential regulatory hurdles, particularly the pending approval by the Federal Court of Australia. Overall, this transaction aligns well with Alcoa's strategy to fortify its upstream operations, but the true impact will only be measurable post-integration.
From a market perspective, Alcoa's move to acquire Alumina Limited positions it more competitively in the global aluminum industry. By increasing control over core, tier-one assets, Alcoa can potentially secure its supply chain against market volatility. This strategic acquisition could enhance Alcoa's bargaining power with customers and suppliers, leading to better pricing and contract terms.
Investors should consider that while the acquisition promises operational flexibility, the aluminum market is susceptible to fluctuations in commodity prices and geopolitical dynamics. The successful completion of this acquisition could provide Alcoa with a buffer against such market uncertainties, reinforcing its standing as a leading upstream aluminum company.
Stockholders Indicate Strong Support
Approximately 99 percent of Alcoa shares present at the Special Meeting of Stockholders today voted in favor of the issuance of shares of Alcoa stock in connection with the transaction. Final voting results will be reported on a Form 8-K that the Company will file with the
The proposed acquisition, when complete, will strengthen Alcoa's position as one of the world’s largest bauxite and alumina producers with increased ownership of core, tier-one assets, resulting in significant and long-term value creation from greater financial and operational flexibility.
“The strong support from our stockholders reflects their recognition of this strategic step to enhance Alcoa’s global position as a leading pure-play, upstream aluminum company," said William F. Oplinger, President and Chief Executive Officer of Alcoa Corporation. “We are pleased to have reached this important milestone in the transaction.”
Alumina shareholders will consider and vote on the Scheme on July 18, 2024. The Scheme is then subject to approval by the Federal Court of
Transaction Website
Associated materials regarding the transaction are available on the investor relations section of Alcoa’s website at www.alcoa.com as well as a transaction website at www.strongawacfuture.com.
Advisors
J.P. Morgan Securities LLC and UBS Investment Bank are acting as financial advisors to Alcoa, and Ashurst and Davis Polk & Wardwell LLP are acting as its legal counsel.
About Alcoa Corporation
Alcoa is a global industry leader in bauxite, alumina and aluminum products with a vision to reinvent the aluminum industry for a sustainable future. With a values-based approach that encompasses integrity, operating excellence, care for people and courageous leadership, our purpose is to Turn Raw Potential into Real Progress. Since developing the process that made aluminum an affordable and vital part of modern life, our talented Alcoans have developed breakthrough innovations and best practices that have led to greater efficiency, safety, sustainability and stronger communities wherever we operate.
Cautionary Statement on Forward-Looking Statements
This news release contains statements that relate to future events and expectations and as such constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements include those containing such words as “aims,” “ambition,” “anticipates,” “believes,” “could,” “develop,” “endeavors,” “estimates,” “expects,” “forecasts,” “goal,” “intends,” “may,” “outlook,” “potential,” “plans,” “projects,” “reach,” “seeks,” “sees,” “should,” “strive,” “targets,” “will,” “working,” “would,” or other words of similar meaning. All statements by Alcoa Corporation (“Alcoa”) that reflect expectations, assumptions or projections about the future, other than statements of historical fact, are forward-looking statements, including, without limitation, statements regarding the proposed transaction; the ability of the parties to complete the proposed transaction; the expected benefits of the proposed transaction; the competitive ability and position following completion of the proposed transaction; forecasts concerning global demand growth for bauxite, alumina, and aluminum, and supply/demand balances; statements, projections or forecasts of future or targeted financial results, or operating performance (including our ability to execute on strategies related to environmental, social and governance matters); statements about strategies, outlook, and business and financial prospects; and statements about capital allocation and return of capital. These statements reflect beliefs and assumptions that are based on Alcoa’s perception of historical trends, current conditions, and expected future developments, as well as other factors that management believes are appropriate in the circumstances. Forward-looking statements are not guarantees of future performance and are subject to known and unknown risks, uncertainties, and changes in circumstances that are difficult to predict. Although Alcoa believes that the expectations reflected in any forward-looking statements are based on reasonable assumptions, it can give no assurance that these expectations will be attained and it is possible that actual results may differ materially from those indicated by these forward-looking statements due to a variety of risks and uncertainties. Such risks and uncertainties include, but are not limited to: (1) the non-satisfaction or non-waiver, on a timely basis or otherwise, of one or more closing conditions to the proposed transaction; (2) the prohibition or delay of the consummation of the proposed transaction by a governmental entity; (3) the risk that the proposed transaction may not be completed in the expected time frame or at all; (4) unexpected costs, charges or expenses resulting from the proposed transaction; (5) uncertainty of the expected financial performance following completion of the proposed transaction; (6) failure to realize the anticipated benefits of the proposed transaction; (7) the occurrence of any event that could give rise to termination of the proposed transaction; (8) potential litigation in connection with the proposed transaction or other settlements or investigations that may affect the timing or occurrence of the contemplated transaction or result in significant costs of defense, indemnification and liability; (9) the impact of global economic conditions on the aluminum industry and aluminum end-use markets; (10) volatility and declines in aluminum and alumina demand and pricing, including global, regional, and product-specific prices, or significant changes in production costs which are linked to LME or other commodities; (11) the disruption of market-driven balancing of global aluminum supply and demand by non-market forces; (12) competitive and complex conditions in global markets; (13) our ability to obtain, maintain, or renew permits or approvals necessary for our mining operations; (14) rising energy costs and interruptions or uncertainty in energy supplies; (15) unfavorable changes in the cost, quality, or availability of raw materials or other key inputs, or by disruptions in the supply chain; (16) our ability to execute on our strategy to be a lower cost, competitive, and integrated aluminum production business and to realize the anticipated benefits from announced plans, programs, initiatives relating to our portfolio, capital investments, and developing technologies; (17) our ability to integrate and achieve intended results from joint ventures, other strategic alliances, and strategic business transactions; (18) economic, political, and social conditions, including the impact of trade policies and adverse industry publicity; (19) fluctuations in foreign currency exchange rates and interest rates, inflation and other economic factors in the countries in which we operate; (20) changes in tax laws or exposure to additional tax liabilities; (21) global competition within and beyond the aluminum industry; (22) our ability to obtain or maintain adequate insurance coverage; (23) disruptions in the global economy caused by ongoing regional conflicts; (24) legal proceedings, investigations, or changes in foreign and/or
View source version on businesswire.com: https://www.businesswire.com/news/home/20240716954858/en/
Investor Contact:
Jim Dwyer
412-992-5450
James.Dwyer@alcoa.com
Media Contact:
Courtney Boone
412-527-9792
Courtney.Boone@Alcoa.com
Source: Alcoa
FAQ
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