$4.1 billion deal spans Australia, Brazil and South Africa
Alcoa Corporation has agreed to buy South32 Limited’s interests in bauxite, alumina and aluminium operations for about $4.1 billion upfront.
The cash-and-stock deal gives the transaction an implied enterprise value of about $4.7 billion, including net debt tied mainly to normal course financing leases.
Alcoa will also grant South32 a contingent value right of up to $750 million. Those payments will depend on agreed revenue-sharing linked to future alumina and aluminium prices.
The acquisition covers the Boddington bauxite mine and Worsley alumina refinery in Western Australia.
It also includes the Mineração Rio do Norte bauxite mine and the Alumar alumina refinery and aluminium smelter in Brazil.
In South Africa, the package includes the Hillside aluminium smelter and the idled Bayside smelter property.
Meanwhile, South32’s Mozal aluminium smelter in Mozambique is not part of the transaction.
Alcoa will pay $3.1 billion in cash and about 17.0 million newly issued common shares valued at about $1.0 billion.
That share figure uses Alcoa’s 10-day volume weighted average price of $58.79 a share on 26th June 2026.
After issuance, the new shares would represent about 6% of Alcoa’s outstanding shares.
$750 million contingent value right
South32 may receive the extra $750 million over four annual periods starting on 1st July 2026.
In Australia, South32 plans to distribute at least half of the Alcoa shares it receives to eligible South32 shareholders through an in-specie distribution.
It may sell the remaining shares in an orderly manner.
“These high-quality, globally relevant assets are a strong strategic fit within our portfolio and align directly with our strengths as a leading pure-play upstream aluminium company,” said William F. Oplinger, Alcoa’s President and Chief Executive Officer.
According to Alcoa, the combined portfolio should generate about $900 million in synergies on a net present value basis.
The company expects the deal to increase earnings per share and free cash flow immediately after closing.
Alcoa expects the purchase to expand its mine-to-metal platform and increase supply chain resilience across key jurisdictions.
It also deepens Alcoa’s presence in Australia and Brazil and gives the company a new presence in South Africa.
Both boards have unanimously approved the transaction. However, South32 shareholders, regulators and other customary closing conditions must still approve it.
To fund the cash portion, Alcoa secured an initial $3.1 billion bridge commitment from Goldman Sachs.
Before closing, Alcoa plans to replace that bridge with balance sheet cash and permanent debt financing.
The company scheduled an investor conference call for 7:00pm EDT on 30th June 2026, which is 9:00am AEST on 1st July 2026.
