Alcoa slips after $2.2 bln Alumina buyout deal

Alumina

26/02/2024 11:05

** Alcoa's shares  AA.N  drop 3% to $25.7 premarket 
    ** Aluminum producer to buy Australian partner Alumina
 AWC.AX  in $2.2 bln all-stock deal
    ** Alcoa CEO William Oplinger says, deal to eliminate
Alumina's annual overhead costs of $7.87 mln and allow combined
company to tap tax advantages 
    ** Alumina shareholders would receive 0.02854 shares of
Alcoa common stock for each share held, giving them a 31% stake
in the combined company     
    ** The deal offers a 13% premium to Alumina's last closing
price of A$1.09 on Monday
    ** Deal to give the company greater upstream exposure and
simplify its operations, says AA
    ** Brokerage Jefferies says, deal would simplify AA's
corporate structure and governance
    ** Deal to improve AA's "vertical integration in aluminum
and give it greater operational flexibility and increased
leverage"- Jefferies 
    ** Brokerage believes the all-stock deal is "best" for AA as
it doesn't "stretch its balance sheet" during a "weak point in
the cycle"
    ** AA is down 22% YTD as of last close

 (Reporting by Johann M Cherian and Pranav Kashyap in Bengaluru)
 ((johann.mcherian@thomsonreuters.com;))