Alcoa Corporation has announced that it has entered into a definitive agreement to acquire South32 Limited’s interests in bauxite mine, alumina refinery and aluminum smelter operations in a cash and stock transaction for an upfront consideration of approximately $4.1 billion. The transaction represents an implied enterprise value of approximately $4.7 billion when including net debt primarily related to normal course financing leases. Alcoa has also agreed to provide South32 with a contingent value right of up to $750 million.

The acquisition will add a high-quality, low-cost, and globally diversified set of mining, refining and smelting assets, further strengthening Alcoa’s mine-to-metal platform, expanding its global footprint and increasing the Company’s ability to generate sustainable long-term value for shareholders. The acquisition also advances Alcoa’s disciplined, value-creating growth strategy and enhances its position as a leading pure-play upstream aluminum company with a more competitive portfolio of world-class assets in strategically important regions around the globe.

South32’s operations are a strong strategic fit within Alcoa. Alcoa’s proven operating model, technical expertise, and commercial capabilities are expected to unlock meaningful performance improvements and synergies across the combined portfolio. Greater scale and integration are expected to reduce complexity, lower costs, and improve competitiveness while strengthening supply chain resilience across key jurisdictions.

At the same time, the transaction is anticipated to deliver broad benefits to stakeholders worldwide. It enhances Alcoa’s secure and reliable global aluminum supply at a time of accelerating demand for critical minerals and metals. It reinforces Alcoa’s long-term commitment and investment in Australia and Brazil and establishes a new presence in South Africa. By strengthening industrial capacity in these regions, the transaction will support economic resilience and thousands of direct and indirect jobs across local communities.

Executive Commentary

“This is exactly the type of opportunity Alcoa is built to execute,” said William F. Oplinger, President and Chief Executive Officer of Alcoa. “These high-quality, globally relevant assets are a strong strategic fit within our portfolio and align directly with our strengths as a leading pure-play upstream aluminum company. With our proven operating model and global capabilities, we are well positioned to enhance performance, unlock value, and support their long-term success within Alcoa.”

Mr. Oplinger continued, “Alcoa is defined by how we operate, combining operational excellence, commercial discipline, and a values-based approach that prioritizes safety, reliability, and partnership. By investing in this opportunity, we are underscoring our commitment to supply security for our customers, strengthening the communities in which we operate, and delivering responsibly produced materials that are essential to the global economy.”

“The Board is pleased to support this transaction, which we believe strengthens Alcoa’s competitive position, supports long-term earnings and cash flow growth, and creates lasting value for our shareholders,” said Thomas J. Gorman, Chairman of the Board of Alcoa. “We remain committed to the employees and stakeholders whose contributions are central to the success of these operations.”

Strong Strategic and Financial Rationale

• Strengthens leadership as a pure-play upstream aluminum company: Upon closing, Alcoa will be a leading global alumina and aluminum producer with CY2025 pro forma production of 3.2 Mmt aluminum and 14.8 Mmt alumina, enhancing its scale and global competitiveness while improving its position to capture growth in long-term demand.
• Represents a natural strategic fit: Alcoa is well positioned to own and operate these assets, given their alignment with its value-creation strategy, operational expertise, and proximity to existing operations. This is a logical industry consolidation of like assets. The combined expertise and operating model are expected to enhance performance and increase cost competitiveness over time. Greater integration across bauxite, alumina, and aluminum improves security of supply and diversifies mine-to-metal routes, strengthening our ability to serve customers globally. Culturally, Alcoa is a values-driven organization with a deep understanding of the central role it plays in communities where it operates, which will benefit and further support the regions in which the assets are located.
• Unlocks significant value through synergies: The transaction is expected to generate synergies of approximately $900 million in net present value through operational optimization across complementary assets and application of best practices. Consolidating the life of asset planning across the Western Australia mining and refining operations provides a considerable portion of the anticipated synergies. In addition, the transaction consolidates South32’s Brazilian joint venture interests in the Alumar alumina refinery and aluminum smelter and provides Alcoa with new growth opportunities and an entry point into South Africa through a globally competitive aluminum smelter.
• Delivers compelling financial benefits: The acquisition is expected to improve Alcoa’s proforma position of its global aluminum and alumina operations on the cost curves and enable stronger cash generation through the cycle. The transaction is also expected to be accretive to Alcoa’s earnings per share and free cash flow immediately following closing, increasing Alcoa’s potential for shareholder returns and additional investments.

Transaction Details

Under the terms of the agreement, Alcoa will acquire South32’s interests in the Boddington bauxite mine and the Worsley alumina refinery in Western Australia; the Hillside aluminum smelter and idled Bayside smelter property in South Africa; and the Mineração Rio do Norte (MRN) bauxite mine and the Alumar alumina refinery and aluminum smelter in Brazil. The transaction will exclude South32’s Mozal aluminum smelter in Mozambique.

Alcoa will pay South32 an upfront consideration of $3.1 billion in cash and approximately 17.0 million newly issued Alcoa common stock carrying an implied value of approximately $1.0 billion, for a total upfront consideration of approximately $4.1 billion. The newly issued Alcoa shares will represent approximately 6% of Alcoa’s outstanding shares post issuance. South32 may receive up to $750 million in aggregate according to terms of a CVR, which provides additional consideration if the average alumina or aluminum price exceeds the respective agreed strike price for each of four successive, annual periods, commencing on July 1, 2026. All, some or none of the CVR’s $750 million aggregate value may be paid at the end of each of the four annual periods. At the conclusion of the fourth annual period, the CVR will expire.

Upon closing, South32 will distribute at least half of the Alcoa shares received as consideration directly to eligible South32 shareholders via an in-specie distribution; the remaining shares can be sold by South32 in an orderly manner.

Alcoa has secured fully committed financing for the transaction in the form of an initial $3.1 billion bridge commitment from Goldman Sachs, which it plans to replace with cash from the balance sheet and permanent debt financing prior to transaction close. Alcoa remains focused on maintaining a strong balance sheet through the cycle and expects to manage its capital structure in a disciplined manner following closing.

Transaction Timing and Closing Conditions

The transaction is expected to close in the first half of 2027, subject to the approval of South32’s shareholders, the receipt of required regulatory approvals, and the satisfaction of certain other customary closing conditions. The transaction has been unanimously approved by both Alcoa’s and South32’s Board of Directors.