Alcoa aims to be No. 1 again

Jul 01, 2007 | 02:30 PM |

With its bid for Alcan, North America's largest metals producer has put itself squarely in the firing line. The shape of North America's aluminum industry might never be the same.

Alain J.P. Belda, Alco
Alain J.P. Belda, Alco
While Alcoa Inc.'s $33-billion cash-and-share bid for Canadian rival Alcan Inc. might become a lesson in the law of unintended consequences, one thing seems almost certain whatever the result of the hostile bid, the North American aluminum landscape will be altered as one or both companies emerge in different form.

Should the recent current bid succeed—unlikely, with Alcan's stock trading almost $10 higher than Alcoa's offer—there will almost certainly have to be divestitures to satisfy antitrust concerns.

First on that list would be aerospace plate, where both companies hold leading positions and have recently completed expansions, followed possibly by packaging, which would be less traumatic since Alcoa had already effectively placed its packaging operations under review.....

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