Key facts
- South32 will sell most of its aluminium assets to Alcoa.
- The deal has an implied enterprise value of up to $5.6 billion.
- Acquired assets include interests in Australia's Worsley Alumina, South Africa's Hillside Aluminium, and Brazilian operations.
- Alcoa will assume approximately $1.2 billion in rehabilitation provisions.
- The transaction is expected to conclude in the second half of 2027.
Australia's South32 announced on Wednesday it has agreed to sell most of its aluminium assets to Alcoa for an implied enterprise value of up to $5.6 billion. The deal includes Alcoa's acquisition of South32's interests in Australia's Worsley Alumina, South Africa's Hillside Aluminium, and Brazilian operations including the MRN bauxite mine, Brazil Alumina refinery, and Brazil Aluminium smelter.
Alcoa will also assume approximately $1.2 billion in related rehabilitation provisions for these projects. Incoming South32 CEO Matthew Daley, who started his role on July 1, stated that the divestment will simplify the company's portfolio to higher-margin upstream operations, reduce complexity, and enhance resilience. He anticipates the implementation of new support structures will lead to a leaner, lower-cost operating model and an annual reduction in overhead costs of $125 million.
In a separate statement, Alcoa indicated that the transaction is expected to generate synergies valued at around $900 million in net present value through operational optimization across their complementary assets. The completion of the transaction is anticipated in the second half of 2027.