Alcoa Partners with Chinalco to Acquire 12% Stake in Rio Tinto (posted 2/1/08)
Alcoa Inc. recently announced that it is partnering with Aluminum Corporation of China (Chinalco) to acquire 12% of the UK common stock of Rio Tinto plc. Alcoa will contribute up to $1.2 billion to the total investment. “We have long believed that Rio Tinto has a world-class portfolio of assets and is very well positioned to prosper in the current mining cycle,” said Alain Belda, Alcoa chairman and chief executive officer. “This investment, made in partnership with Chinalco, allows us to mutually benefit from developments in the sector. We have known Chinalco for many years, dating back to our participation in the successful launch of Chalco’s IPO, and are looking forward to this new venture.”
The investment will be made through a Special Purpose Vehicle, called Shining Prospect Pte. Ltd. (SPPL), created for this purpose. SPPL is based in Singapore and wholly owned by Chinalco. Through its investment, Alcoa will acquire an equity stake in SPPL commensurate with its cash contribution to the investment.
In response to Alcoa’s announcement, Rio Tinto Chairman Paul Skinner said in a statement, “This unsolicited development, of which we had no prior notice, reinforces our view of the long-term value of Rio Tinto. In line with our long-standing strategy, we shall continue to focus on operating our many world-class assets to maximize value and prospects for all shareholders.”
For additional information, visit www.alcoa.com. Rio Tinto’s website is located at www.riotinto.com.