Alcoa buys titanium supplier RTI for $1.5B
Steel producer says acquisition will broaden its push into the aerospace industry.
aerospace and defence
NEW YORK CITY — Alcoa is taking another step to bolster its stake in the aerospace industry with a $1.5 billion deal to buy titanium supplier RTI International Metals.
The New York-based company said it will buy the specialty metal products company in an all-stock deal. Alcoa said the aerospace and defence industries accounted for 80% of Pittsburgh-based RTI’s revenues last year.
Alcoa has been shifting from its traditional role of mining and smelting aluminum to becoming a more diversified maker of lightweight metal and alloy products for aerospace, autos and other industries. It has benefited from demand for aluminum and other lightweight materials used to make planes more fuel-efficient.
Last week, Alcoa said it completed its acquisition of the German titanium and aluminum structural castings company Tital. That company’s titanium castings are used in aircraft engines and frames. It also completed in the fourth quarter the purchase of Firth Rixson, which makes alloy parts for jet engines.
For its latest deal, Alcoa plans to trade slightly more than 2.8 Alcoa shares for each RTI share.
The $1.5 billion deal value includes $330 million in RTI cash and up to $517 million in the company’s convertible notes.
Alcoa also said it will review 14% of its global smelting capacity and 16% of its refining capacity for possible curtailment or divestiture. The company has curtailed, closed or sold 31 per cent of its smelting capacity since 2007.
© 2015 The Canadian Press