Alcoa’s $3.4 Billion Alumina Limited Takeover Gains Shareholder Approval

Alcoa's planned acquisition of its joint venture partner, Alumina Limited, has passed a significant milestone with Alcoa stockholders voting overwhelmingly in favor of the $3.4 billion deal. Approximately 99% of Alcoa shares present at the meeting supported the issuance of shares under the proposed transaction, initially announced in February.

The next step is a vote by Alumina's shareholders on the scheme of arrangement, scheduled for July 18. Following this, the deal requires approval from the Federal Court of Australia. Under the proposed terms, Alumina's shareholders would receive 0.02854 Alcoa shares for each Alumina share held, valuing the transaction at approximately $3.4 billion.

Alcoa and Alumina Limited have been partners in the Alcoa World Alumina and Chemicals (AWAC) joint venture, a 60-40 collaboration, since its inception in 1994. The AWAC joint venture operates and holds interests in several bauxite mines and alumina refineries both in Australia and internationally, including sites at Pinjarra, Wagerup, and Kwinana.

The acquisition announcement follows Alcoa's decision to source an additional one million tonnes of alumina to offset the output loss from the closure of its aging Kwinana alumina refinery, citing age, scale, operating costs, and current bauxite grades as reasons for the shutdown.

Alcoa has emphasized that the proposed acquisition reinforces its commitment to Western Australia, despite the recent decision to curtail operations at the Kwinana refinery. Alcoa's CEO William Oplinger expressed satisfaction with the stockholders' strong support, highlighting it as a strategic move to bolster Alcoa's global standing as a leading pure-play, upstream aluminum company.

JP Morgan and UBS are serving as financial advisers to Alcoa, while Ashurst and David Polk and Wardwell LLP are providing legal counsel for the transaction.