Graham Warwick/WASHINGTON DC
Aluminium producer Alcoa has agreed to purchase Cordant Technologies, parent company of Howmet Castings and Huck Fasteners, in a deal valued at $2.9 billion.
Alcoa says its merger with Cordant brings together companies with "obvious complementary activities". While Alcoa is the leading producer of aluminium stock, Cordant is a major manufacturer of aluminium components for aerospace and industrial applications through Howmet and Huck. Boeing is the biggest aerospace customer for both companies, Cordant says.
Cordant's Thiokol Propulsion division, which produces solid rocket motors, seems a less obvious fit, but Alcoa says it plans to hold on to the operation.
Alcoa has agreed to pay cash for Cordant, and to assume $685 million in debt. The company will also take over Cordant's outstanding offer to acquire the 15% of Howmet that it does not already own.
Cordant had revenues last year of $2.5 billion and employs 17,200 people, compared with Alcoa's workforce of 103,500 and $16.3 billion in sales. The transaction requires shareholder and regulatory approval and is expected to be completed within six months.
Alcoa is in the process of acquiring US company Reynolds, the world's number three producer of aluminium. Announced last year as a response to a Alcan/Alusuisse/ Pechiney deal, the Alcoa/Reynolds merger is still under regulatory review.
Alcan and Pechiney, meanwhile, plan to submit new merger proposals for European Union approval after Brussels approved the tie-up of Canada's Alcan Aluminium and Alusuisse Lonza of Switzerland, but blocked France's Pechiney from joining the planned $17 billion three-way deal, which would have created the world's largest aluminium producer. The Alcan-Alusuisse merger still needs US antitrust approval.
Source: Flight International
