Alcoa might sell 3 business units

Alcoa Inc. said Wednesday that it might sell three of its businesses including its packaging unit, which makes Reynolds Wrap.

The world’s largest aluminum company said the strategic alternatives review would include sale or possible joint ventures for the packaging, electrical and automotive castings businesses.

The units contributed about 16%, or $4.8 billion, of the company’s revenue in 2006.

The sale of the businesses could reduce Alcoa’s workforce of 122,000 by more than a third. The packaging, electrical and automotive businesses employ about 10,000, 34,000 and 500 employees, respectively.

The move follows a similar path taken by Canadian rival Alcan Inc. Two years ago, Alcan spun off its products business, which now operates independently as Novelis Inc. The move allowed Alcan to focus on its core business of making aluminum.

Wall Street has been pushing for a similar move by New York-based Alcoa and has argued that Alcoa’s packaging assets are a drag on its operating results.

The packaging unit is expected to attract heavy private equity interest because these firms have flocked to packaging-related deals in the last few years. At least four buyout firms pursued the sale of Berry Plastics Group Inc. last spring, with Apollo Management and Graham Partners agreeing to buy the business for $2.25 billion in June.

Alcoa’s shares rose $1.81, or 5.3%, to $35.76.