Alcoa of Australia Progresses $3.4 Billion Acquisition of Alumina Limited

Alcoa of Australia has made significant progress in its $3.4 billion acquisition of Alumina Limited, with the announcement of an amendment to the terms of the deal. The amendment now includes CITIC affiliates obtaining a small percentage of non-voting shares in the transaction.

The aluminium producer has entered into a deed of amendment and restatement with Alumina Limited, adjusting the terms of the acquisition based on Alcoa’s share price at the time of the initial announcement in February. The deal is now valued at $US2.2 billion or $A3.4 billion.

Under the revised terms, Alumina shareholders will receive a scheme consideration of 0.02854 chess depositary interests, or new Alcoa CDIs, for each Alumina share held. The amendment covers CITIC affiliates receiving a small proportion of new Alcoa non-voting shares, equivalent to about 1.5 per cent of the pro forma outstanding Alcoa common stock.

Alcoa stated that the economic rights of the new Alcoa non-voting shares are generally equivalent to the economic rights of the new Alcoa CDIs. Upon completion of the transaction, Alumina shareholders will own 31.25 per cent of the combined company, with Alcoa shareholders owning the remaining 68.75 per cent.

The amendment is expected to advance the transaction, with completion anticipated in the third quarter of 2024. Alcoa president and chief executive William F. Oplinger expressed confidence in the benefits the acquisition will bring to both Alcoa and Alumina Limited shareholders.

The scheme has received backing from Allan Gray, the largest substantial holder in Alumina Limited at 19.9 per cent. CITIC, the parent company of Perth-based CITIC Pacific Mining, is involved in the transaction, further solidifying the deal’s progress and potential impact on the industry.