Alcoa has announced that its Board of Directors has unanimously approved a plan to separate into two independent publicly-traded companies. The move will see the formation of an ‘Upstream’ company and a ‘Value-Add’ company and is expected to be completed in the second half of 2016.
The upstream company will comprise of five business units that today make up Global Primary Products – Bauxite, Alumina, Aluminium, Casting and Energy. The innovation and technology-driven value-add company will include Global Rolled Products, Engineered Products and Solutions, and Transportation and Construction Solutions.
The company stated that both independent companies will attract an investor base best suited to their unique value proposition and operational and financial characteristics. After the separation, the upstream company, with its strong history in the aluminium and alumina markets, will operate under the Alcoa name. The value-add company will be named prior to closing.
“In the last few years, we have successfully transformed Alcoa to create two strong value engines that are now ready to pursue their own distinctive strategic directions,” stated Klaus Kleinfeld, Chairman and Chief Executive Officer.
“After steering the Company through the deep downturn of 2008, we immediately went to work reshaping the portfolio. We have repositioned the upstream business; we have an enviable bauxite position and are unrivalled in Alumina, we have optimised Aluminium, flexed our energy assets, and turned our casthouses into a commercial success story. The upstream business is now built to win throughout the cycle. Our multi-material value-add business is a leader in attractive growth markets. We have intensified innovation, made successful acquisitions, shed businesses without product differentiation, invested in smart organic growth, expanded our multi-materials profile and brought key technologies to market; all while significantly increasing profitability,” added Kleinfeld.
Alcoa recently announced a $60 million expansion of its R&D centre to grow its Additive Manufacturing businessas well as a further $22 million investment in HIP technology at its facility in Whitehall, Michigan.
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