By Paul Ploumis 29 Sep 2015 Last updated at 03:51:15 GMT
SEATTLE (Scrap Monster): Aluminum giant Alcoa has decided to split itself into two separate publicly traded companies. The decision follows unanimous approval by the company’s board of directors yesterday. The transaction is expected to be completed during the latter half next year, subject to certain conditions.
The separation will isolate the company’s parts-making units from its raw aluminum operations. The upstream company will take care of the company’s business related to bauxite-mining, alumina-refining, aluminum-production, casting and energy. The upstream company will be called Alcoa. The second entity will be called “value-add company” for the time being and will include global rolled products, engineered products and solutions, and transportation-and-construction businesses.
Post separation, each company will have its own independent board of directors. The board and management teams for both entities will be announced in a few months. Klaus Kleinfeld, Chairman and CEO of Alcoa will serve as the Chairman of the upstream company. In addition, he will also lead the value-add company as Chairman and CEO. The separation will launch two leading edge Fortune 500 companies, both capable to stand on its own.
The upstream company will own 64 facilities including the world’s largest bauxite mining resources. The company will have nearly 17,000 employees. The company will have the world’s largest alumina refining system and will also be the fourth largest aluminum producer in the world. Meantime, the value-add company will have around 157 operating locations with 43,000 employees. The company will turn out to be a key supplier to both automotive and aerospace industry. It will also be the leader in commercial aluminum truck wheels and will continue to be the leader in North American architectural system.