Alumina Limited announced today it will back an exclusive takeover bid from joint-venture partner Alcoa in a deal worth $3.4 billion.
The deal will see Alcoa acquire 100 per cent of Alumina via a scheme of arrangement, for scrip consideration of 0.02854 shares of Alcoa common stock for each Alumina share.
The proposal prices Alumina at a 13.1 per cent premium from its share price on February 23 and represents a 19.5 per cent premium based on the average exchange ratio over the past year.
With a transaction process and exclusivity deed in place between the two parties, Alcoa has been granted a 20 business day period of exclusivity in which to negotiate an implementation agreement.
Alumina has suggested its shareholders vote in favour of the deal, which is the culmination of a series of earlier offers from Alcoa.
Alumina Limited owns 40 per cent of Alcoa World and Alumina Chemicals (AWAC), with ties to Alcoa dating back to 1961.
The AWAC joint venture holds a global network of assets including bauxite mines and alumina refineries in Australia, Brazil, Spain, Saudi Arabia and Guinea.
AWAC also has a 55 per cent interest in the Portland aluminium smelter in Victoria, Australia.
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