March 18, 2015
Alcoa Acquires Titanium Producer RTI
Aluminum giant Alcoa, New York, is continuing its effort to expand its materials portfolio with the acquisition of RTI International Metals, Inc., Pittsburgh. RTI is a leading producer of titanium and other specialty metal products for the aerospace, defense, energy and medical device markets. Alcoa plans to purchase RTI for approximately $1.5 billion, though shareholder groups reportedly may contest the deal.
With RTI, Alcoa will grow its value-add businesses and further strengthen its aerospace portfolio. RTI will expand Alcoa’s range of titanium offerings and add advanced technologies and materials.
“Alcoa is accelerating its value-add growth engine by acquiring titanium leader RTI,” said Klaus Kleinfeld, Alcoa chairman and CEO. “We are combining two innovators in materials science and process technology, shifting Alcoa’s transformation into a higher gear. RTI expands our aerospace portfolio market reach and positions us to capture future growth to deliver compelling value for customers, shareholders and employees.”
“Innovation and scale are critical to winning in both the titanium and aerospace industries today, which is why this transaction is such a natural strategic fit for both RTI and Alcoa,” said Dawne Hickton, RTI’s president and CEO. “RTI will take its innovative technologies to the next level and deliver even more value-add titanium solutions to meet customer needs.”
This transaction is expected to enable Alcoa to capitalize on strong growth in the commercial aerospace sector. Alcoa projects a compounded annual global aerospace market growth rate of 5 to 6 percent through 2019.
Eighty percent of RTI’s revenues in 2014 were from the aerospace and defense industries, with the balance split between other markets including energy and medical devices. This complements Alcoa’s growth markets, the company claims.
The planned RTI deal comes on the heels of Alcoa’s acquisition of Europe’s TITAL, a leading manufacturer of titanium and aluminum structural castings for aircraft engines and airframes.