Alcoa’s acquisition of Alumina Limited builds on our commitment to Western Australia and provides significant and long-term benefits to both companies’ shareholders, and broader stakeholders and communities.
“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 and Alumina Limited have entered into a binding Scheme Implementation Deed with Alumina Limited, under which Alcoa will acquire Alumina Limited in an all-scrip, or all-stock, transaction. The Agreement terms are consistent with the previously agreed and announced transaction process deed.
Under the terms of the transaction, Alumina Limited shareholders would receive consideration of 0.02854 Alcoa shares for each Alumina Limited share.1 Based on Alcoa’s closing share price as of February 23, 2024, the agreed ratio implies an equity value of approximately $2.2 billion for Alumina Limited.
The Alumina Limited Board of Directors has recommended that Alumina Limited shareholders vote in favor of the Agreement in the absence of a superior proposal and subject to an independent expert concluding (and continuing to conclude) that the transaction is in the best interests of Alumina Limited shareholders. The Independent Directors of Alumina Limited and its Managing Director and Chief Executive Officer intend to vote all shares of Alumina Limited held or controlled by them in favor of the Agreement.
Under the terms of the Agreement and at Alumina's request, Alcoa has agreed to provide short-term liquidity support to Alumina Limited to fund equity calls made by the AWAC joint venture if Alumina Limited’s net debt position exceeds $420 million. Based on AWAC's current 2024 cashflow forecast, Alcoa does not expect any support to be required in the 2024 calendar year. Subject to certain accelerated repayment triggers, Alumina Limited would be required to pay its equity calls (plus accrued interest) not later than September 1, 2025 in the event the transaction is not completed.