US-based Alcoa has completed the sale of its rolling mill and associated assets near Evansville, Indiana, to Kaiser Aluminum, with Alcoa retaining ownership of the smelting capacity at the Warrick facility while providing a re-entry into the North American aluminum packaging industry for Kaiser, the companies said April 1.
Kaiser completed the purchase of the assets March 31 for roughly $680 million, including the assumption by Kaiser of related other post-retirement employee benefit liabilities, Alcoa said.This consideration amount is subject to customary post-closing adjustments, the companies said April 1.
Under the agreement, Alcoa will retain ownership of the site's 269,000 mt/year aluminum smelter and its electric generating units and enter a ground lease with Kaiser for the rolling mill. Alcoa has entered into a market-based metal supply agreement, a long-term ground lease, and a transition services agreement with Kaiser, the companies said.
For Kaiser, the deal provides a re-entry into the North American aluminum packaging industry.
"The outlook for the beverage and food packaging markets is strong with favorable demand and industry dynamics driving growth," Kaiser CEO Keith Harvey said in a statement. "The Warrick rolling mill is one of only four dedicated can sheet mills in North America and we expect to become a significant participant in the supply chain solution in meeting the growing North American demand."
Kaiser will provide additional information and an updated outlook for 2021, reflecting the addition of Warrick, during its first quarter earnings call in April 2021, it said.
The sale of the rolling mill is part of Alcoa's previously announced strategy to generate between $500 million and $1 billion in cash through the sale of non-core assets, with the Warrick deal putting the total cash proceeds in the target range, the company said.
The companies first announced the deal in late November.
