special - Alu-web.de

EBITDA of US$ 9.5 billion, before
synergies. In 2006, the combined
company’s alumina capacity would
have been 21.5 million tonnes and
its aluminium capacity would have
been 7.8 million tonnes. In addition,
the combined company would have
188,000 employees in 67 countries.
The transaction is subject to review
by antitrust authorities in various jurisdictions
including the U.S., Canada,
the European Union, Australia and
Brazil. It also requires foreign invest-
ALUMINIUM · 6/2007
ment clearance in Canada, France and
Australia.
“With the changing dynamics of
our industry over the past decade,
we firmly believe that a combination
of the two companies will enhance
our future competitiveness against
increasingly formidable competitors
from around the world. During our
discussions with Alcan last fall, we
explored the regulatory implications
of a combination of the two companies
and our ability to address any po-
Alcoa to take over Alcan: some remarks
Rudolf P. Pawlek
Following the above mentioned Alcoa statement, we
must ask: what drives Alcoa to take over Alcan?
Alcoa is fighting for its independence as it risks itself
being swallowed by Russian, Chinese, Indian or Middle
East competitors. Also the far larger mining giants BHP
Billiton and Rio Tinto, both London-based, were revealed
in February to have each worked up feasibility plans for
an Alcoa takeover.
Alcoa is making much of its commitment to Alcan’s
Canadian operations and is proposing to split its headquarters
between New York and Montreal. Montreal
would have to become the hub of the merged entity’s
primary metal operations to avoid losing C$ 500 million
in interest free loans and tax concessions from the
Quebec government.
Alcoa is vulnerable because, despite doubling in
world aluminium prices in the past years, the company’s
share price has stagnated. And that is due to chronic underperformance
in the downstream segments of Alcoa’s
business, the fabrication of aluminium into everything
from auto parts to beverage cans.
With the masterstroke of buying Alcan, which had
been an Alcoa subsidiary until U.S. antitrust authorities
forced a separation of the two companies in 1928, Alcoa
would achieve three strategic advantages: Firstly with 8
million tpy of primary aluminium capacity the combined
company would again be world leader, well ahead of US
Rusal’s 4 million tpy capacity; secondly, the enlarged Alcoa
might be too big for BHP or Rio to swallow; thirdly,
in meeting anti-monopoly regulations, Alcoa has an opportunity
to divest some under-performing downstream
operations from beverage cans to aerospace products.
Given that Alcoa and Alcan could not come to a meeting
of minds after two years of discussions about some
kind of combination, the firms are not quite the natural
fit that Belda claimed in his statement above.
And going hostile raises the likelihood of Alcan turning
to BHP, Rio Tinto or another white knight bidder.
That would leave Alcoa even further diminished in size
relative to its major rivals, and even more exposed to
ECONOMICS
tential issues a regulator might raise.
We believe that any antitrust issues
raised by an Alcoa-Alcan combination
can be solved through targeted
divestitures and by proactively working
with regulators to address competitive
concerns. We plan to move
expeditiously to address these issues
in order to close this transaction at
the earliest possible date,” said Mr.
Belda.
Alcoa is targeting completion of
the transaction by the end of 2007. �
the predations of whichever Alcan bidders do not succeed
in nabbing that prize. Indeed BHP and Rio Tinto
may already be taking the wraps off their Alcoa takeover
plans.
Alcoa is confident it will receive regulatory approval
for its hostile bid to buy its Canadian rival Alcan, and
is prepared to divest parts of its aerospace and automotive
businesses in several countries in order to do so. �
Stand: 3C17
the solutions
you were looking for…
SERMAS INDUSTRIE
designs, manufactures
and starts up production
processes for the
aluminium and other
industries.
Advantages
Heavy duty equipment
Productivity rise
Production and maintenance cost reduction
Flexibility
Safety
Product quality improvement
SERMAS INDUSTRIE ������������������������������� ���� ���������� ����� ��� �����
�������������������������������������������������������������� sermas@sermas.com
Web: www.sermas.com
15