Alcoa to Acquire Aerospace Supplier Cordant
Alcoa Inc. said that it will acquire Cordant Technologies Inc. for $2.3 billion in a deal that would give the world’s largest aluminum company a stronger presence in aerospace and automotives, plus new access to the burgeoning market for industrial gas turbines. The acquisition of the aerospace and industrial technology company would boost Alcoa revenue to $23.5 billion from $16.3 billion when added to Alcoa’s pending merger with Reynolds Metals Co., keeping the Pittsburgh-based metals giant on track to become a $40-billion company in the next four years. Under the deal, Alcoa would start a $57-per-share cash tender offer for Cordant’s 40 million fully diluted common shares. Alcoa also would assume $685 million in debt, bringing the transaction’s overall value to $2.9 billion. Cordant shares surged $25.50 to close at $55.06, while Alcoa shares slipped $6.81 to close at $61.25 on the NYSE. Salt Lake City-based Cordant generates $2.5 billion in annual revenue from three market-leading business groups, including its 85% stake in Howmet International Inc., the world’s largest manufacturer of precision investment castings for jet aircraft and industrial gas turbine engines.