Summary
Alcoa Inc. (now Howmet Aerospace Inc.) announced on March 22, 2005, a significant divestiture and a restructuring initiative. The company has agreed to sell its 46.5% stake in Elkem ASA to Orkla ASA for approximately $870 million in cash. This transaction is expected to result in an after-tax gain of approximately $180 million, with proceeds slated for debt reduction, capital expansions, and restructuring expenses. The company also announced plans for significant operational restructuring, anticipating after-tax charges of $20-$25 million in the first quarter of 2005. These measures aim to streamline operations under a new global business structure, leading to an estimated annualized savings of $45 million and the reduction of approximately 2,000 positions.
Key Highlights
- 1Alcoa Inc. to sell its 46.5% stake in Elkem ASA for approximately $870 million in cash.
- 2Expected after-tax gain of $180 million from the Elkem ASA sale, with settlement anticipated in Q2 2005.
- 3Proceeds from the sale will be used for debt repayment, capital expansions, and restructuring costs.
- 4Announced restructuring plans impacting North American, European, and South American locations.
- 5Anticipates first quarter 2005 after-tax restructuring charges between $20-$25 million.
- 6Restructuring involves reducing approximately 2,000 positions over the next twelve months.
- 7Expected annualized savings of approximately $45 million from the restructuring initiatives.