Markets
AA

Aluminum-Producing Giant Alcoa to Split into 2 Public Companies in 2016

Headlines that say Stocks, Finance, Markets, Business and World.
Credit: Shutterstock photo

The world leading producer and manager of primary aluminum, fabricated aluminum, and alumina facilities Alcoa Inc. (AA) announced Monday that it will be splitting into 2 separate public companies. Alcoa said it expects the tax-free separation to occur in the second half of 2016, and added that it "will complete a multiyear transformation".

In the split, one company will be an upstream bauxile alumina and aluminum company with a portfolio of manufacturing and energy assets. The second company will be a value-add maker of high performance multi-material products for growth markets, and will include global rolled products, engineered products and solutions, and transportation and construction products.

Current Alcoa CEO and Chairman Klaus Kleinfeld will serve in those positions initially for the value-add company as well as be a chairman of the other company. A CEO of the bauxile alumina and aluminum company has not been named yet though.

From November 21, 2014 to August 24 of this year Alcoa saw its stock drop 55%, but it has since recovered somewhat by adding 20% since then. AA closed Monday up 5.73%, ending at $9.59 and a market cap of $12.56 billion. The company is currently a Zacks Rank #3 (Hold), and is expected to report its third quarter earnings next Friday, October 8 th . The current Zacks EPS Consensus Estimate is $0.16.

Bottom Line

Moving forward it will be interesting to see exactly how investors of Alcoa will be compensated for the shares that they own, as well as how each company post-split performs. Investors should be sure to stay tuned to Zacks as more details come about regarding the split in the coming months, especially those who own a stake in the metal producing leader.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

ALCOA INC (AA): Free Stock Analysis Report

To read this article on Zacks.com click here.

Zacks Investment Research

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

In This Story

AA

Other Topics

Stocks

Latest Markets Videos

    Zacks

    Zacks is the leading investment research firm focusing on stock research, analysis and recommendations. In 1978, our founder discovered the power of earnings estimate revisions to enable profitable investment decisions. Today, that discovery is still the heart of the Zacks Rank. A wealth of resources for individual investors is available at www.zacks.com.

    Learn More