Alcoa to Buy South32 Assets in $4.1 Billion Deal
The aluminum producer will take Worsley Alumina, Hillside Aluminum and Brazil operations for $3.1 billion in cash plus about 17 million shares.
Alcoa Corporation (AA) agreed to acquire South32 Limited’s interests in Worsley Alumina, Hillside Aluminum and Brazil alumina and aluminum assets for an upfront $3.1 billion in cash and about 17.0 million shares of Alcoa common stock, a total value of $4.1 billion and an implied enterprise value of about $4.7 billion including assumed lease-related debt.
The stock portion was valued at Alcoa’s 10-day volume-weighted average price of $58.79 a share as of June 26, 2026. A contingent value right of up to $750 million in cash through 2030, linked to market prices for alumina and aluminum, sits on top of the headline consideration. Mozal Aluminum was excluded from the transaction.
Alcoa said the deal is expected to generate synergies of about $900 million in net present value, complement its portfolio of low-cost global alumina and aluminum operations, be accretive to earnings per share and free cash flow immediately after closing, and enable stronger cash generation through the cycle.
The cash leg will be funded with a $3.1 billion bridge debt commitment, which Alcoa said is expected to be replaced by a mix of cash from the balance sheet and permanent debt financing before closing. The company said it is committed to maintaining a strong balance sheet and to managing capital allocation in a disciplined manner.
South32 is expected to receive about 6% ownership of Alcoa upon closing. At least half of those shares are to be distributed directly to eligible South32 shareholders via an in-specie distribution shortly after closing; retained shares can be sold in an orderly manner.
The transaction is expected to close in the first half of 2027, subject to approval by South32 shareholders, required regulatory approvals, and other customary closing conditions. Alcoa said there are no further diligence or financing conditions.
In its second-quarter 2026 results, Alcoa reported record quarterly revenue, strong operational performance, and progress on multiple smelter capacity restarts, in addition to the announced acquisition of South32’s bauxite, alumina and aluminum assets. The company also announced a final investment decision on July 14, 2026, for a gallium production plant to be co-located at the Wagerup refinery in Australia, and a $65 million investment to expand foundry production at its Mosjøen smelter in Norway.