Alcoa to Separate into Two Public Companies
Alcoa recently announced that its board of directors has unanimously approved a plan to separate into two independent, publicly traded companies, culminating Alcoa’s successful multi-year transformation. An upstream company will comprise five business units that currently comprise Global Primary Products: Bauxite, Alumina, Aluminum, Casting and Energy. The innovation and technology-driven value-add company will include Global Rolled Products, Engineered Products and Solutions, and Transportation and Construction Solutions.
The transaction is expected to be completed in the second half of 2016. At that point, Alcoa shareholders will own all of the outstanding shares of both the upstream and value-add companies. The separation is intended to qualify as a tax-free transaction to Alcoa shareholders for U.S. federal income tax purposes. 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,” said Klaus Kleinfeld, chairman and CEO. “After steering the company through the deep downturn of 2008, we immediately went to work reshaping the portfolio. Inventing and reinventing has defined our company throughout its 126-year history. With the unanimous support of Alcoa’s board, we now take the next step; launching two leading-edge companies, each with distinct and compelling opportunities, and each ready to seize the future.”
Upon completion of the transaction, Klaus 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 and effective transition. Each company will have its own independent board of directors that will include members of the current Alcoa board. Full management teams and boards for both companies will be named in the months leading up to the launch of the two companies in the second half of 2016.
After the separation, the upstream company will be a cost-competitive supplier of bauxite mining, alumina refining and aluminum production, positioned for success throughout the market cycle. The company’s footprint will include 64 facilities worldwide, and approximately 17,000 employees. The value-add company will be a provider of multi-material products and solutions with 157 globally diverse operating locations and approximately 43,000 employees.
For more information, visit www.alcoa.com.