NEW YORK (BLOOMBERG) - Alcoa Inc., the biggest U.S. aluminum maker, will split itself into two public companies.
The first, which will keep the Alcoa name, will concentrate on mining and metal production. The second will focus on high- technology products. The transaction will be completed in the second half of 2016, the company said in a statement.
The new Alcoa will control the units that mine bauxite, the raw material for aluminum, and process it into the lightweight metal, used in everything from aircraft to soft-drink cans. That company will hold a "strong non-investment grade rating", Alcoa said. The second company will seek an investment grade rating.
Alcoa shares rose 6.4 per cent in pre-market trading. The decision is a response to a global oversupply in aluminum markets. The price of the metal has fallen 17 per cent this year as consumption in China slows and producers there try to export more metal.
"With the unanimous support of Alcoa's board we now take the next step; launching two leading-edge companies, each with distinct and compelling opportunities," said Klaus Kleinfeld, Alcoa chairman and chief executive officer, who will run the second, Value-Add company.