Alcoa to sell Warrick rolling mill to Kaiser Aluminum for $670 million

Alcoa Corporation has entered into agreement to sell Alcoa Warrick LLC, covering rolling mill business for total amount of approximately $670 million.  The transaction is likely to close by the end of the first quarter of 2021, subject to regulatory approval and customary closing conditions.

“The sale will achieve a key target in our strategy to focus on core markets while generating additional cash,” said Alcoa President and CEO Roy Harvey. “We look forward to having Kaiser Aluminum as a valued customer at Warrick Operations, and we thank all of the employees who have contributed significantly to the site’s 60-year history of manufacturing excellence.”

The rolling mill operations, which include the casthouse, hot mill, cold mills, and coating and slitting lines, produces approximately 310,000 metric tons of flat rolled aluminium annually for food containers, aluminium cans, and bottles.

Alcoa will retain ownership of the site’s 269,000 metric ton per year aluminium smelter and power plants.

After closing of transactions, Alcoa will expact annual approximate decreases in sales of $800 million, net income (pre- and after-tax) of $45 million to $55 million, and Adjusted EBITDA of $90 million to $100 million. The company will plan approximately $100 million investment for site separation and transaction costs.

Credit Suisse Securities (USA) LLC acted as exclusive financial advisor to Alcoa and Jones Day acted as it served as legal counsel.