Alcoa updates terms of Alumina Limited acquisition

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Image credit: Alcoa

Alcoa Corp announced today it has revised its acquisition agreement with Alumina Limited through a Deed of Amendment and Restatement of the Scheme Implementation Deed initially unveiled on 1 March 2024.

The updated agreement maintains the previously stated compensation for Alumina Limited shareholders, offering 0.02854 New CHESS Depositary Interests (New Alcoa CDIs) or their equivalent for each Alumina Limited share, Alcoa said in a news release.

Each New Alcoa CDI, representing a unit of beneficial ownership in Alcoa common stock, will be tradeable on the Australian Securities Exchange (ASX).

The amendments emerged from collaborative discussions involving CITIC Group, which holds an 18.9 per cent stake in Alumina Limited.

Alcoa’s relationship with CITIC, a stakeholder in the Portland Aluminium joint venture in Victoria, Australia, facilitated these updates. CITIC will now receive around 1.5 per cent of the outstanding Alcoa common stock in non-voting convertible series A preferred stock, instead of New Alcoa CDIs.

This adjustment helps CITIC comply with the U.S. Bank Holding Company Act of 1956, which limits CITIC’s voting shareholding in U.S. public companies.

“The agreed change to the Scheme brings us a step closer to completing the transaction, which will provide significant and long-term benefits to both Alcoa and Alumina Limited shareholders,” said William Oplinger, president and CEO of Alcoa.

Allan Gray Australia Pty Ltd, the largest substantial holder in Alumina Limited, said it continues to support the Scheme.

Consequently, Alcoa and Allan Gray Australia Pty Ltd have mutually terminated their Conditional Share Sale Agreement.

The acquisition is anticipated to conclude in the third quarter of 2024, pending customary conditions, shareholder approvals, and necessary regulatory clearances.

These approvals include the Foreign Investment Review Board in Australia and Brazil’s antitrust regulator.

The Australian Competition and Consumer Commission has indicated it does not intend to conduct a public review of the Scheme.