Alcoa has launched an unsolicited bid for rival Alcan after negotiations on a merger between the US and Canadian aluminium producers failed late last year.
The $33 billion takeover bid would create the world’s largest aluminum company at a time of surging demand for the metal from aerospace and other sectors. Alcoa’s cash-and-stock offer for Alcan requires numerous government approvals.
Alcoa had revenues of $30.4 billion in 2006, with roughly $3.1 billion in sales coming from aerospace. Alcan had revenues of $23.6 billion, of which about $1.6 billion was from engineered products for the aerospace sector.
Alcan is number one in the European aerospace market and number two in North America, behind Alcoa. But the US company is the major supplier for the Airbus A380, which has nine times the aluminium content of an A320.
Based on 2006 figures, the combined Alcoa/Alcan company would have revenues of $54 billion and an aluminium capacity of approximately 7.5 million tonnes. This would take over from Russia’s UC Rusal as the world’s largest aluminium producer.
Formed in March by the merger of Russia’s Rusal and Sual and Switzerland’s Glencore, UC Rusal has an aluminium capacity of just under 4 million tonnes.
Alcoa chairman and chief executive Alain Belda says the merger will create a stronger, more diverse company “with the scale and cost structure to be competitive over the long term within a rapidly changing industry”.
The deal is expected to produce annual cost savings of around $1 billion, which will increase the resources available for research and development, says Alcoa. Alcan says it is examining the offer.
Although both Boeing and Airbus are developing composite-airframe airliners, Alcoa is forecasting aerospace demand for aluminium will continue to grow through 2011 as manufacturers ramp up production rates of existing aircraft to fulfil order backlogs.
The projected delivery rates for very light jets as well as the planned ramp-up of Lockheed Martin F-35 Joint Strike Fighter production is also expected to sustain demand for aluminium, says Alcoa.
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Source: FlightGlobal.com
