(RTTNews) - Rio Tinto and Aluminum Corporation of China Limited or Chalco have entered into a definitive agreement with Votorantim to acquire, through a joint venture to be owned 33% by Rio Tinto and 67% by Chalco, Votorantim's 68.596% controlling shareholding in Companhia Brasileira de Alumínio or CBA.
The deal, at an all cash consideration of R$10.50 per share in CBA, represents a premium of approximately 21.2% over the R$8.67 per share weighted average trading price of CBA's stock for the 20 trading days prior to the signing of the Transaction Agreement and values Votorantim's shareholding in CBA at approximately $902.6 million (Rio Tinto's pro-rata amount being $297.8 million).
Following closing, the Joint Venture will launch a mandatory tender offer for the remaining shares in CBA not held by Votorantim, as required by Brazilian law.
Rio Tinto International Holdings Limited, a wholly owned subsidiary of Rio Tinto plc, is party to the Transaction Agreement and is expected to hold Rio Tinto's 33% shares in the Joint Venture.
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