Alcoa secures $2.6b debt financing for proposed acquisition of South32’s bauxite, alumina and aluminium assets

Alcoa Corporation has completed a USD 2.6 billion senior notes offering, securing permanent debt financing for the cash component of its proposed acquisition of South32’s bauxite, alumina and aluminium assets.

The offering, which closed on September 23, comprises USD 1.5 billion of 6.63 per cent senior notes due 2034 issued by Alumina Pty Ltd and USD 1.1 billion of 6.88 per cent senior notes due 2036 issued by Alcoa Nederland Holding B.V. Both issuers are wholly owned subsidiaries of Alcoa, while the notes are guaranteed on a senior unsecured basis by Alcoa and certain of its subsidiaries.

USD 2.6 billion debt backs cash consideration

Alcoa intends to combine the net proceeds from the notes with cash on hand to finance the approximately USD 3.1 billion cash portion of the consideration for its proposed acquisition of South32’s interests in selected bauxite mines, alumina refineries and aluminium smelter operations. The funds will also cover related fees and expenses.

The company has also terminated all remaining commitments under its 364-day senior unsecured bridge term loan facility following completion of the debt offering. This marks a shift from temporary acquisition financing towards longer-term debt funding for the transaction.

The notes were sold through private placements to qualified institutional buyers under Rule 144A and to certain non-US investors through offshore transactions under Regulation S.

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South32 acquisition still awaits approvals

Despite the financing milestone, the South32 acquisition itself has not yet closed. Completion remains subject to conditions including approval from South32 shareholders, required regulatory approvals and other customary closing conditions.

Alcoa announced the proposed acquisition in June 2026 at an upfront consideration of approximately USD 4.1 billion in cash and stock, alongside a contingent value right of up to USD 750 million. The transaction carries an implied enterprise value of approximately USD 4.7 billion, including net debt primarily associated with normal-course financing leases. Alcoa has estimated approximately USD 900 million in net present value synergies from the deal.

The acquisition is intended to expand Alcoa's integrated mine-to-metal platform, adding South32 interests across bauxite mining, alumina refining and aluminium smelting.

Financing secured, transaction remains the next milestone

With the USD 2.6 billion notes now issued and the bridge facility commitments terminated, Alcoa has secured the planned permanent financing for the cash component of the transaction. The remaining focus is on satisfying the corporate and regulatory conditions required to complete the South32 asset acquisition.

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