Alcoa board approves demerger, after Alumina peace deal

<p>Alcoa&rsquo;s board has approved the New York Stock Exchange-listed aluminium giant&rsquo;s demerger into two public entities, scheduled to come into effect on November 1.<br /><br />Spin-off Arconic will provide high-performance materials and engineered products to the aerospace and automotive industries, while Alcoa will focus on bauxite, alumina and aluminium products, the company said. <br /><br />Alcoa&rsquo;s current chairman and chief executive Klaus Kleinfeld will become the chairman and chief executive of Arconic. Alcoa&rsquo;s new chairman will be current director Michael Morris, while group president of global primary products Roy Harvey will become Alcoa&rsquo;s chief executive.</p> <p><img style="display: block; margin-left: auto; margin-right: auto;" src="http://www.alcircle.com/uploads/images/NewAlcoaArconic-3logos-595.jpg" alt="New Alcoa" width="595" height="197" /><br /><br />The company said it will make the separation through a distribution of 80.1 per cent of the common stock of the demerged Alcoa, while Arconic will keep 19.9 per cent of the common stock of the demerged Alcoa.<br /><br />The plans follow a peace deal with Melbourne-based Alumina over the companies&rsquo; alumina joint venture AWAC, which resolved a looming court action that threatened to delay the demerger.</p> <p>{googleAdsense}<br /><br />Alcoa had planned to transfer AWAC into the new legal entity as part of the demerger. Alumina said this plan triggered first-right-of-refusal rights to buy Alcoa&rsquo;s stake in the joint venture.<br /><br />The parties&rsquo; revised agreement allows Alumina more opportunity to veto corporate activity within AWAC, as well as possibly providing larger cash flows.</p>