PITTSBURGH - Alcoa Corporation (NYSE:AA), a leader in bauxite, alumina, and aluminum products, has amended its acquisition agreement with Alumina (OTC:AWCMY) Limited, according to a press release statement. The revised Scheme Implementation Deed follows discussions with key stakeholders, including CITIC Group, which controls an 18.9% stake in Alumina Limited.
Under the new terms, CITIC will receive a portion of its consideration in non-voting convertible preferred stock to comply with U.S. banking regulations, rather than New CHESS Depositary Interests (CDIs) as initially planned.
This adjustment allows CITIC to maintain its stake without exceeding the 5% voting share threshold set by the Bank Holding Company Act of 1956. The economic rights of these non-voting shares will be equivalent to those of the New Alcoa CDIs.
Alcoa's President and CEO, William F. Oplinger, stated that this agreement modification brings the companies closer to finalizing the transaction, which is slated for completion in the third quarter of 2024. He emphasized the long-term benefits anticipated for shareholders of both entities.
Allan Gray Australia Pty Ltd, the largest substantial holder in Alumina Limited, has reiterated its support for the transaction. Consequently, Alcoa and Allan Gray Australia Pty Ltd have terminated their Conditional Share Sale Agreement.
The transaction is progressing as scheduled, with necessary approvals pending from Australia's Foreign Investment Review Board, Brazil's antitrust regulator, and both companies' shareholders. The Australian Competition and Consumer Commission has indicated it will not conduct a public review of the Scheme.
Financial advisory roles are being filled by J.P. Morgan Securities LLC and UBS Investment Bank, with Ashurst and Davis Polk & Wardwell LLP providing legal counsel.
Alcoa, with its commitment to sustainable industry practices, has been a pioneer in the aluminum sector since its inception. The company's announcements on financial performance and corporate developments will continue to be communicated through its website and other formal channels.
This press release statement serves as the basis for the information provided, with no additional claims or speculations included. The transaction details reflect a significant move within the industry, yet the article abstains from commenting on the potential market or industry-wide implications.
InvestingPro Insights
Alcoa Corporation's (NYSE:AA) recent strategic moves reflect its commitment to growth and industry leadership. As investors consider the implications of Alcoa's amended acquisition agreement with Alumina Limited, it is worth examining some key financial metrics and insights provided by InvestingPro. With a current market capitalization of $7.67 billion, the company's financial landscape is a critical aspect of its future prospects.
One notable metric is Alcoa's gross profit margin, which stands at 7.34% for the last twelve months as of Q1 2024. This figure underscores the InvestingPro Tip that the company suffers from weak gross profit margins, which may be a concern for investors looking for robust profitability. Alcoa's stock price has experienced significant volatility, another InvestingPro Tip highlighting the potential risks associated with the company's shares.
Despite these challenges, Alcoa has demonstrated strong returns, with a 55.0% price total return over the last three months and an impressive 56.29% over the last six months. This performance is indicative of the company's resilience and the positive sentiment among investors regarding its long-term strategy. Moreover, with analysts predicting that Alcoa will be profitable this year, there is a sense of optimism surrounding the company's financial outlook.
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