Alcoa Acquires South32’s Aluminum and Bauxite Assets in $4.1 Billion Deal
Alcoa Corporation (AA) has agreed to acquire South32 Limited’s aluminum, alumina, and bauxite assets in a transaction valued at $4.1 billion upfront, combining cash and stock. The deal includes South32’s Boddington bauxite mine and Worsley alumina refinery in Western Australia, the Hillside aluminum smelter and idled Bayside site in South Africa, as well as Brazil’s Mineração Rio do Norte (MRN) bauxite mine and Alumar alumina refinery and aluminum smelter. South32’s Mozal smelter in Mozambique is excluded from the transaction.
The purchase involves a $3.1 billion cash payment and the issuance of approximately 17 million new Alcoa shares valued at $1 billion. Post-transaction, the new shares will constitute about 6% of Alcoa’s outstanding equity. South32 may receive up to $750 million in additional payments via a price-contingent value right tied to aluminum and alumina prices over four annual periods starting July 1, 2026.
Including net debt, primarily from leased properties, the transaction implies an enterprise value of $4.7 billion. Alcoa projects immediate accretion to earnings per share and free cash flow post-closing, alongside $900 million in net present value synergies through operational efficiencies. Pro forma metrics for 2025 estimate 14.8 million metric tons of alumina and 3.2 million metric tons of aluminum production.
Funding the deal, Alcoa secured a $3.1 billion bridge facility from Goldman Sachs, to be replaced with existing cash reserves and permanent financing prior to closure. The transaction is anticipated to finalize in the first half of 2027.
Alcoa CEO William F. Oplinger stated: “This opportunity aligns with our strategic focus as a pure upstream aluminum leader. These assets enhance our operational scale and global footprint, reinforcing our ability to deliver sustainable value.”
