Chinalco, Rio Tinto to Buy Brazil's CBA for $904M

Deal at a Glance

Chinalco and Rio Tinto have officially agreed to acquire a controlling 68.6% stake in Companhia Brasileira de Aluminio CBA for 4.69 billion reais or approximately $903.61 million. The acquisition from Brazilian conglomerate Grupo Votorantim involves 446.6 million shares priced at 10.50 reais each.

Transaction Overview

The stake will be managed through a newly formed joint venture. Chinalco’s subsidiary will hold a majority 67% ownership while Rio Tinto will hold the remaining 33%. CBA is known for its low-carbon integrated aluminum production chain which includes bauxite mining, refining, and smelting operations.

Market Implications

Following the acquisition, Brazilian regulations mandate a tender offer for the remaining shares of CBA. This action could potentially lead to the company's delisting from the B3 stock exchange in Sao Paulo. The move secures access to significant primary aluminum production assets for the global mining giants.

Summary

This strategic purchase highlights a significant consolidation in the aluminum sector. Chinalco and Rio Tinto gain control over a key low-carbon producer in Brazil. Market participants will now watch the mandatory tender offer process and its impact on CBA's public listing status.

FAQ

Q: Who is acquiring CBA?
A: A joint venture formed by Chinalco and Rio Tinto is acquiring a controlling stake.

Q: What is the total value of the deal?
A: The deal for the 68.6% stake is valued at 4.69 billion reais, which is about $903.61 million.

Q: Will CBA remain a publicly traded company?
A: The new owners will launch a mandatory tender offer for remaining shares, which could result in CBA being delisted.

Source: Investing.com