Aluminum product maker Arconic is negotiating an offer

Published: Aug 27, 2018 13:42

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SMM8 27: according to people familiar with the matter, aluminum product manufacturer Arconic Inc. A takeover offer for the entire company is under discussion, although the company only announced the sale of its construction unit last month.

Arconic is in talks with private equity firms interested in acquiring the company, including a consortium from Blackstone (Blackstone Group LP) and Carlyle (Carlyle Group LP), another consortium from KKR & Co and Onex Corp, and Apollo Global Management LLC, sources said on Friday. Arconic shares rose 4.7% to $22.23 on Friday. Elliott Management Corp, an advocacy hedge fund, played an important role in pushing the company to seek a sale, according to people familiar with the matter. However, some sources added that some private equity firms were sceptical about whether the company's high price expectations could be met. Sources warned that a deal could not be reached at high prices.

Arconic, Elliott, KKR and Onex did not immediately respond to requests for comment. Apollo, Carlyle and Blackstone also declined to comment. The Wall Street Journal reported for the first time last month that Arconic was attracting interest from private equity firms. Arconic said it would announce the results of its strategic review ahead of Investor Day in November 2018. Arconic products are made of aluminum, titanium or nickel and are used by aerospace, automotive, commercial transport and packaging manufacturers around the world. Aircraft manufacturers are ramping up production to meet the growing global demand for air travel, while Pittsburgh-based Arconic is paying more attention to aircraft parts. Some parts suppliers are increasing recruitment and capital expenditure to meet delivery targets.

In a conference call with analysts last month, Kenneth Giacobbe, Arconic's chief financial officer, said rising costs had cut the company's revenue by $20 million in the second quarter. However, sales of Arconic's three main businesses-transport and construction, engineering products and global rolled products-increased by 7.5 to 14 per cent.

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Arconic Aluminium Mining Import and Export

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