Sept. 30, 2015

Alcoa to Split into Separate Companies

In a move to enhance its value to shareholders, aluminum giant Alcoa plans to separate into two public companies, one representing its upstream business and the other its downstream business. The downstream value-add company will include Alcoa’s Global Rolled Products, Engineered Products and Solutions, and Transportation and Construction Solutions segments. The upstream company will include business units that make up its existing Global Primary Products unit: Bauxite, Alumina, Aluminum, Casting and Energy. Alcoa shareholders will own all of the outstanding shares of both the upstream and value-add companies upon the deal’s completion in second-half 2016.

Both independent companies will attract investors best suited to their unique value proposition and operational and financial characteristics, the company claims. After the separation, the upstream company, with its strong history in the aluminum and alumina markets, will operate under the Alcoa name. The value-add company will be named prior to closing.

“In the last few years, we have successfully transformed Alcoa to create two strong value engines that are now ready to pursue their own distinctive strategic directions,” says Klaus Kleinfeld, chairman and CEO. Once the transaction is final, Kleinfeld will lead the value-add company as chairman and CEO. He will also serve as chairman of the upstream company for the critical initial phase, ensuring a smooth transition. Each company will have its own independent board of directors that will include members of the current Alcoa board.

After the separation, the value-add company will be a premier provider of high-performance multi-material products and solutions with 157 globally diverse operating locations and approximately 43,000 employees. The value-add company will be positioned for profitable growth by increasing share in fast growing end markets and leveraging significant customer synergies across the midstream and downstream portfolios, the company claims.


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Monday, October 23, 2017