1. Alcoa Inc. plans to make an unsolicited $26.9 billion cash and stock takeover offer for Alcan Inc. to create the world's largest aluminum producer as metal prices rally. That values Alcan at $73.25, or 20 percent more than its closing price on May 4. Including debt, the deal would be valued at $33 billion.
2. Alcoa and Alcan have been losing market share to producers in Russia and China as aluminum prices doubled the past four years.
3. Alcoa wants to increase focus on aluminum production, its most profitable business.
4. Alcan has more of its earnings and sales from primary metals and alumina and Alcoa does not, so putting the two together emphasizes a broader plate of products.
5. Alcoa and Alcan combination would create a company with 7.8 million tons of production capacity and $54 billion in sales.
6. Alcoa forecast $1 billion in savings within three years of acquiring Alcan.
7. Alcoa plans to resolve antitrust concerns by selling some assets. (Alcan was created from Alcoa-owned assets when the company was ordered by U.S. regulators in 1928 to break up its Canadian and foreign assets into a separate company.)
Inorganic growth - yes.
Cost synergies - yes (despite dual HQs at New York and Montreal?).
But organic growth?
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