Alcoa Corporation offers to buy Alumina Limited in a share swap deal

SYDNEY: Alcoa Corporation has made a conditional offer to buy all the shares of Alumina Limited through a share swap deal, a financial news announcement noted.

Alumina shareholders would receive 0.02854 Alcoa shares for each Alumina share they own. This offer values Alumina at 13.1% higher than its closing price on 23 February 2024, and 19.5% higher than its average exchange ratio in the past year.

According to ASX announcement, the offer comes after previous discussions and due diligence between the two companies, which are both involved in the mining and production of bauxite and aluminium.

The Alumina Board has endorsed the offer, subject to the approval of an independent expert and the absence of a better offer.
The Board has also agreed to give Alcoa 20 business days of exclusive negotiations. The details of the Transaction Process and Exclusivity Deed are attached.

The offer is still subject to the finalisation of a binding agreement, as well as the approval of the regulators and the shareholders of both companies.

Alcoa has also secured an agreement with Allan Gray Australia, a major shareholder of Alumina, to buy up to 19.9% of Alumina shares at the same exchange ratio. This agreement will be announced in a substantial holder notice to the ASX.