Alcoa Makes $26.9B Hostile Bid For Rival Alcan

Alcoa launched a $26.9 billion hostile bid for chief rival Alcan that would create a giant player in the ever-consolidating aluminum industry.

Alcoa’s cash-and-stock bid valued each share of Alcan at $73.25, a 20% premium to Alcan’s Friday closing price of $61.03, a record closing high for the stock. The offer is comprised of $58.60 a share in cash and 0.4108 of an Alcoa share.

Shares of Alcan were up nearly 33%, near $81 a share, and well above the offer price — as observers said competing offers for the Canada-based company likely are in the works.

“However, any potential bidders may wait for some clarity on the regulatory front,” Deutsche Bank analyst David Martin said in a research note.

Nate Eimer, an antitrust attorney in Chicago, said an Alcoa-Alcan combination likely is in for a hard look from regulators.

“This one will get a lot of attention because of the concentration in North American aluminum,” Eimer said. “Whether this goes through or not I think is going to be a close question.”

Eimer said Alcoa probably will “argue it’s no longer North American, it’s a global market for aluminum.” Eimer also expects it to shift the focus beyond just aluminum, saying it is “going to be talking about plastics, steel, and other materials that are substitutes for aluminum in processes.”

Shares of Alcoa were trading 7% higher.