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Arconic Corporation (NYSE: ARNC) announced its decision to sell its Russian operations, specifically the facility in Samara, due to the ongoing conflict in Ukraine and regulatory constraints from the Russian government. This sale will incur a charge of up to $500 million. CEO Tim Myers emphasized the company's focus on employee safety and their well-being during this transition. The review of strategic alternatives underscores Arconic's commitment to transparency and compliance with applicable laws.
Positive
Pursuing the sale of Russian operations may reduce legal and operational risks associated with ongoing regulatory issues.
Focus on employee safety during the transition reflects strong corporate governance.
Negative
Expected charge of up to $500 million due to the sale could impact financial results.
The operational viability in Russia has been deemed untenable, indicating potential loss of market presence.
PITTSBURGH--(BUSINESS WIRE)--
Arconic Corporation (NYSE: ARNC) (“Arconic” or the “Company”) announced today that the Company will be pursuing the sale of its Russian operations. The Company undertook a thoughtful review of strategic alternatives given the limitations imposed on our operations by the Russian government and as a result of the ongoing legal dispute with the Russian Federal Anti-Monopoly Service. This review has been conducted consistent with the Company’s nearly 20-year history of transparency with the United States government, starting with consultation about the original acquisition.
Following this review, the Company has determined, with the support of the Board of Directors, to pursue a sale of the facility in Samara, Russia in strict compliance with all applicable laws. As a result, the Company expects to record a charge of up to $500 million.
Tim Myers, Chief Executive Officer, said, “Sadly, the conflict in Ukraine has made our operation in Russia untenable. We continue to prioritize the safety and well-being of our more than 3,000 world class employees and their families. We appreciate all of their hard work through a very challenging time and we will endeavor to provide them with a successful transition moving forward.“
About Arconic Corporation
Arconic Corporation (NYSE: ARNC), headquartered in Pittsburgh, Pennsylvania, is a leading provider of aluminum sheet, plate, and extrusions, as well as innovative architectural products, that advance the ground transportation, aerospace, building and construction, industrial and packaging end markets. For more information: www.arconic.com.
Forward-Looking Statements
This 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 "anticipates," "believes," "could," "estimates," "expects," "forecasts," "goal," "guidance," "intends," "may," "outlook," "plans," "projects," "seeks," "sees," "should," "targets," "will," "would," or other words of similar meaning. All statements that reflect Arconic’s expectations, assumptions, projections, beliefs or opinions about the future, other than statements of historical fact, are forward-looking statements, including, without limitation, statements, relating to the condition of, or trends or developments in, the ground transportation, aerospace, building and construction, industrial, packaging and other end markets; Arconic’s future financial results, operating performance, working capital, cash flows, liquidity and financial position; cost savings and restructuring programs; Arconic's strategies, outlook, business and financial prospects; share repurchases; costs associated with pension and other post-retirement benefit plans; projected sources of cash flow; and potential legal liability. These statements reflect beliefs and assumptions that are based on Arconic’s perception of historical trends, current conditions and expected future developments, as well as other factors Arconic believes are appropriate in the circumstances. Forward-looking statements are not guarantees of future performance, and actual results may differ materially from those indicated by these forward-looking statements due to a variety of risks, uncertainties and changes in circumstances, many of which are beyond Arconic’s control. Such risks and uncertainties include, but are not limited to: (a) continuing uncertainty regarding the duration and impact of the COVID-19 pandemic on our business and the businesses of our customers and suppliers including labor shortages and increased quarantine rates; (b) deterioration in global economic and financial market conditions generally; (c) unfavorable changes in the end markets we serve; (d) the inability to achieve the level of revenue growth, cash generation, cost savings, benefits of our management of legacy liabilities, improvement in profitability and margins, fiscal discipline, or strengthening of competitiveness and operations anticipated or targeted; (e) adverse changes in discount rates or investment returns on pension assets; (f) competition from new product offerings, disruptive technologies, industry consolidation or other developments; (g) the loss of significant customers or adverse changes in customers’ business or financial condition; (h) manufacturing difficulties or other issues that impact product performance, quality or safety; (i) the impact of pricing volatility in raw materials and inflationary pressures on our costs of production; (j) a significant downturn in the business or financial condition of a key supplier or other supply chain disruptions; (k) challenges to or infringements on our intellectual property rights; (l) the inability to successfully implement our re-entry into the U.S. packaging market or to realize the expected benefits of other strategic initiatives or projects; (m) the inability to identify or successfully respond to changing trends in our end markets; (n) the impact of potential cyber attacks and information technology or data security breaches; (o) geopolitical, economic, and regulatory risks relating to our global operations, including compliance with U.S. and foreign trade and tax laws, sanctions, embargoes and other regulations; (p) the outcome of contingencies, including legal proceedings, government or regulatory investigations, and environmental remediation and compliance matters; (q) restrictions imposed by authorities on the operation of our Samara, Russia facility; (r) the impact of the conflict between Russia and Ukraine on economic conditions in general and on our business and operations; and (s) the other risk factors summarized in Arconic’s Form 10-K for the year ended December 31, 2021 and other reports filed with the U.S. Securities and Exchange Commission (SEC). The above list of factors is not exhaustive or necessarily in order of importance. Market projections are subject to the risks discussed above and in this release, and other risks in the market. The statements in this release are made as of the date of this release, even if subsequently made available by Arconic on its website or otherwise. Arconic disclaims any intention or obligation to update publicly any forward-looking statements, whether in response to new information, future events, or otherwise, except as required by applicable law.
