Alumina39;s only asset is 40 stake in AWAC JV with Alcoa
AWAC has assets in Guinea, Spain, Saudi, Brazil, Australia
New entity to simplify operations, tap global growth footprint

MELBOURNE, Feb 26 Reuters U.S. aluminium producer Alcoa on Monday made a 2.2 billion allstock buyout proposal for its Australian joint venture partner Alumina, in a deal that would give it greater upstream exposure and simplify its operations.

Alumina39;s only asset is a 40 stake in the Alcoa World Alumina and Chemicals AWAC joint venture, which is controlled by Alcoa and has interests in bauxite mining, alumina refining and aluminium smelting across Australia, Brazil, Spain, Saudi Arabia and Guinea.

Alcoa CEO William Oplinger told analysts the deal would eliminate Alumina39;s A12 million 7.87 million a year of overhead costs and allow the combined company to tap tax advantages related to holding debt.

The broader global footprint will also allow Alcoa more options for growth, he added.

Under the proposed deal, Alumina shareholders would receive 0.02854 shares of Alcoa common stock for each share held, giving them a 31 stake in the combined company. This would imply a value of A1.15 per Alumina share, based on Alcoa39;s closing price as of Friday.

Alumina shares closed 7 Australian cents higher at A1.09 on Monday.

The Melbournebased company said its board backed the deal in the absence of a superior offer, though it also noted there was no certainty the proposal would be made binding….