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Alcoa (NYSE:AA) said Sunday it agreed to acquire Australian miner Alumina (OTCQX:AWCMF) (OTCQX:AWCMY) in an all-stock deal that values its equity at ~A$3.35B (US$2.2B), bolstering its position as of one of the world’s largest bauxite and alumina producers.
Alumina (OTCQX:AWCMF) (OTCQX:AWCMY) owns a 40% stake in Alcoa World Alumina & Chemicals, a joint venture with Alcoa (AA) that owns and operates bauxite mining, alumina refining and aluminum smelting operations.
Alumina’s (OTCQX:AWCMF) (OTCQX:AWCMY) largest shareholder, Allan Gray Australia, entered into an agreement with Alcoa (AA) that gives the U.S. company the right to acquire up to 19.9% of Alumina’s issued share capital.
Under the deal terms, Alumina (OTCQX:AWCMF) (OTCQX:AWCMY) shareholders would receive consideration of 0.02854 Alcoa (AA) shares for each Alumina share, representing a 13% premium to Alumina’s closing share price on Friday.
Upon completion, Alcoa (AA) shareholders would own 68.75% of the combined company while Alumina (OTCQX:AWCMF) (OTCQX:AWCMY) shareholders would own 31.25%.