Summary
Arconic Inc. (now Howmet Aerospace Inc.) announced on December 8, 2017, the divestiture of its Latin America Extrusions (LAE) business, primarily operating in Brazil. This strategic move is part of the company's ongoing effort to streamline its business portfolio, reduce complexity, and concentrate on higher-margin products and profitable growth. The transaction is expected to close in the first half of 2018, subject to regulatory and antitrust approvals. While Arconic will receive approximately $10 million in cash (subject to adjustments), the company anticipates recognizing a pre-tax restructuring charge of approximately $40 million in the fourth quarter of 2017. This charge is mainly due to the non-cash impairment of the net book value of the LAE business, resulting in an after-tax impact of $0.08 per diluted share. Investors should note that final amounts are still being determined and will be detailed in the upcoming Form 10-K.
Key Highlights
- 1Arconic is divesting its Latin America Extrusions (LAE) business, primarily in Brazil.
- 2The divestiture is aimed at streamlining the business portfolio and focusing on higher-margin products.
- 3The transaction is expected to close in the first half of 2018, pending regulatory approvals.
- 4Arconic will receive approximately $10 million in cash, subject to working capital adjustments.
- 5A pre-tax restructuring charge of approximately $40 million (or $0.08 per diluted share after-tax) is expected in Q4 2017, largely due to non-cash impairment.
- 6The LAE business is part of the Transportation and Construction Solutions segment.
- 7Further details will be provided in the company's Form 10-K for the year ended December 31, 2017.