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