WASHINGTON (dpa-AFX) - Alcoa Corporation (AA) said late Tuesday it has agreed to acquire South32 Limited's aluminum, alumina and bauxite assets in a cash-and-stock deal valued at about $4.1 billion upfront.
The acquisition includes South32's interests in the Boddington bauxite mine and Worsley alumina refinery in Western Australia, the Hillside aluminum smelter and idled Bayside smelter property in South Africa, and the Mineração Rio do Norte (MRN) bauxite mine and Alumar alumina refinery and aluminum smelter in Brazil. South32's Mozal aluminum smelter in Mozambique is excluded from the transaction.
Alcoa will pay $3.1 billion in cash and issue approximately 17 million new shares valued at about $1 billion, bringing the total upfront consideration to roughly $4.1 billion. The newly issued shares will represent about 6% of Alcoa's outstanding shares following the transaction.
South32 may also receive up to $750 million in additional payments through a contingent value right tied to alumina and aluminum prices over four successive annual periods beginning July 1, 2026.
Including net debt, mainly related to financing leases, the transaction carries an implied enterprise value of about $4.7 billion.
Alcoa said the acquisition is expected to be immediately accretive to earnings per share and free cash flow upon closing. The company also expects to generate about $900 million in net present value synergies through operational improvements and efficiencies across the combined portfolio.
Upon closing, Alcoa expects its pro forma 2025 production to reach 14.8 million metric tons of alumina and 3.2 million metric tons of aluminum.
To fund the acquisition, Alcoa has secured a fully committed $3.1 billion bridge financing facility from Goldman Sachs and plans to replace it with cash on hand and permanent debt financing before the deal closes.
The transaction is expected to close in the first half of 2027.
'This is exactly the type of opportunity Alcoa is built to execute,' said William F. Oplinger, President and Chief Executive Officer of Alcoa. 'These high-quality, globally relevant assets are a strong strategic fit within our portfolio and align directly with our strengths as a leading pure-play upstream aluminum company. With our proven operating model and global capabilities, we are well positioned to enhance performance, unlock value, and support their long-term success within Alcoa.'
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