Kaiser Aluminum plans to expand its reach in the aluminum packaging industry in North America after it finalized its $670mn acquisition of the Warrick Rolling Mill from Alcoa.
The US-headquartered aluminum maker will integrate Warrick’s 1,200 employees into the company and noted in a news release, that the acquisition will allow it to expand and substantially improve, diversify, and cut the cyclical nature of its portfolio.
Kaiser plans to include Warrick’s addition in its Q1 earnings report later in April and will revise its 2021 outlook accordingly. Industry dynamics have been strengthening demand and boosting growth, resulting in a bullish market outlook for the industries served by the company.
Alcoa will keep ownership of Warrick’s related smelting assets, power plant, and land. As part of the deal, Kaiser agreed to a long-term ground lease covering utility service terms, and other arrangements that involve a market based molten aluminum supply agreement with Alcoa along with provisions for the transition.
The deal concluded on Mar 31 and the full cost was financed by existing cash and the assumption of other post-employment benefits liabilities, subject to other typical post-closing regulations.
The Warrick rolling mill is one of four North American can sheet mills and the company anticipates it will play a large role in the supply chain by meeting the increasing demand for aluminum packaging products in North America.
California-based Kaiser Aluminum is a global producer of semi-fabricated specialty aluminum products, supplying to aerospace and high-strength, packaging, custom automotive, general engineering, and other industrial functions. The company’s North American sites offer sheet, plate, extrusions, rod, bar, tube, and wire products.