Benefits of the Transaction

Delivering Compelling Strategic and Financial Benefits for all Stakeholders

Alcoa’s acquisition of Alumina Limited increases Alcoa’s economic interest in its core business and simplifies governance by acquiring the minority partner in its AWAC JV, resulting in greater operational flexibility and strategic optionality. It also allows Alumina Limited shareholders to participate in the upside potential of a stronger, better-capitalized company with a larger and more diversified portfolio while offering exposure to Alcoa’s upstream aluminum business.

Among other significant and long-term benefits to all stakeholders, this acquisition:

  • Increases Alcoa’s exposure to its core, tier-1 bauxite and alumina business, and provides Alumina Limited shareholders with exposure to Alcoa’s global aluminum business. 
  • Bolsters Alcoa’s global position as the leading pure-play upstream aluminum company.
  • Offers Alumina Limited shareholders ownership in a stronger, well-capitalized business.
  • Simplifies corporate structure and governance, resulting in greater operational flexibility and strategic optionality.
  • Bolsters long-term financial profile and maximizes value creation for both companies’ shareholders.
  • Reaffirms Alcoa’s commitment to Western Australia – a premier global mining jurisdiction.

Here’s What People Are Saying* About Alcoa’s All-Stock Acquisition of Alumina Limited

Alcoa’s acquisition of Alumina Limited makes sense! Investors, industry analysts and the media agree that this transaction is the result of a clearly defined strategy aimed at strengthening the global aluminum industry and delivering value creation for all shareholders

Allan Gray, Alumina’s Largest Shareholder

“To a very large degree it simplifies the corporate structure.”
Allan Gray Chief Investment Officer Simon Mawhinney
February 26, 2024
“[...] it’s never too late to make improvements to a company structure. I think it’s important and long overdue.”
“Alcoa’s investment in WA is massive to begin with, they’re only increasing it now.”
Allan Gray Chief Investment Officer Simon Mawhinney
February 26, 2024
“There is huge leverage to the upside, we believe, if prices normalise.”
“There are some reasonably significant shortcomings to the current joint venture structure that this would dissolve and where both Alumina Limited and Alcoa shareholders could stand to benefit from that going forward as well. That is things like being able to put debt into the joint venture and not having a debt or interest cost outside the joint venture that is not tax-deductible, as is currently the case for Alumina Limited.”
Allan Gray Chief Investment Officer Simon Mawhinney
February 26, 2024

Alcoa and Alumina Analysts Believe in the Merits of the Transaction

“We think the stars are aligned for the process to progress to completion with AWC recommending the deal.”
February 25, 2024
“We believe this transaction consolidating and centralizing AWAC ownership under Alcoa should bring more transparent corporate structure and governance and allow Alcoa to better allocate capital, unlock tax and finance advantages, drive more strategic efficiencies and reduce overhead while fully integrating its upstream aluminum position with increased ownership of Tier 1 industry cost mining and refining assets, and more fully capture and potential upside in alumina price volatility.”
February 26, 2024

Industry Columnists are Supportive of the Transaction's Strategic Rationale

“[…] an Alcoa-Alumina deal looks as close to a win-win as either side could expect.”
February 26, 2024
“Some of the benefits include more vertical integration—Alcoa will have more control over its needed upstream raw materials. It also simplifies corporate structures, resulting in lower costs.”
February 26, 2024
“The deal […] gives Alcoa greater control and faster decision-making – vital at a time the aluminium sector is going through a difficult period, as lower prices for alumina combine with rising costs, including from steering emissions-intensive smelting and refining assets through a complex and expensive energy transition.”
February 26, 2024
*Permission to use quotes neither sought nor obtained