Alcoa of Australia has advanced its $3.4 billion acquisition of Alumina Limited, updating the terms to include CITIC affiliates obtaining a small percentage of non-voting shares.
The aluminium producer announced today that it has entered into a deed of amendment and restatement with Alumina Limited. Based on Alcoa's share price at the time of the acquisition announcement in February, the deal is valued at $2.2 billion USD, or approximately $3.4 billion AUD.
The deed has been amended to allow CITIC affiliates to receive a small proportion of new Alcoa non-voting shares, equivalent to about 1.5 percent of the pro forma outstanding Alcoa common stock, instead of new Alcoa CDIs. The economic rights of these new non-voting shares are generally equivalent to those of the new Alcoa CDIs.
Hong Kong-based Citic Group holds an 18.9 percent stake in Alumina Limited. Under the amended deal, Alumina shareholders will receive a scheme consideration of 0.02854 chess depositary interests (new Alcoa CDIs) for each Alumina share held. Upon completion, Alumina shareholders will own 31.25 percent of the combined company, while Alcoa shareholders will hold the remaining 68.75 percent.
Each new Alcoa CDI represents a unit of beneficial ownership in a share of Alcoa common stock, allowing Alumina Limited shareholders to trade Alcoa common stock via the new CDIs on the Australian Securities Exchange.
Alcoa stated that this amendment would facilitate the completion of the transaction, expected in the third quarter of 2024. Alcoa president and chief executive William F. Oplinger noted that the change brings the transaction closer to completion, which will benefit both Alcoa and Alumina Limited shareholders.
Allan Gray, the largest substantial holder in Alumina Limited at 19.9 percent, has supported the scheme. CITIC is the parent company of Perth-based Citic Pacific Mining, managing the Sino Iron operations in the Pilbara.
