Rio Tinto and the Aluminum Corporation of China (Chalco) have signed a definitive agreement to jointly acquire a controlling stake in Companhia Brasileira de Alumínio (CBA) from Votorantim.
The acquisition, structured through a joint venture (JV), with Rio Tinto holding 33% and Chalco 67%, values Votorantim’s 68.596% stake in CBA at approximately $902.6m.
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The transaction will involve a cash payment of 10.50 reais ($0.66) per share, reflecting a 21.2% premium over the prior 20-day average trading price of CBA shares.
Following the completion of the acquisition, the JV plans to initiate a mandatory tender offer for the remaining shares in CBA, as mandated by Brazilian legislation.
This marks an effort by Rio Tinto and Chalco to enhance their footprint in the global low-carbon aluminium sector by leveraging their combined expertise in aluminium production to drive growth at CBA.
The transaction remains subject to regulatory approvals and customary conditions.
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By GlobalDataCBA runs a comprehensive low-carbon aluminium operation in Brazil, bolstered by a 1.6GW portfolio of renewable energy featuring 21 hydropower plants and wind power installations.
The company primarily serves the domestic market, with production activities spanning three bauxite mines that yield around two million tonnes (mt) annually and facilities including an alumina refinery and an aluminium smelter.
Rio Tinto aluminium and lithium CEO Jérôme Pécresse said: “This acquisition, jointly with Chalco, of Votorantim’s controlling position in CBA’s fully integrated aluminium supply chain in Brazil is aligned with our strategy to deliver value for shareholders by extending our low-carbon, renewable-powered aluminium footprint in rapidly growing markets. It also provides the opportunity to grow our bauxite and alumina supply chain in the Atlantic region.
“Our partnership with Chalco brings together our combined operational excellence, innovation and unique project execution capabilities, unlocking the potential to create value for the benefit of our shareholders, as well as CBA’s employees, customers and local communities.”
Rio Tinto’s fully owned subsidiary, Rio Tinto International Holdings, is participating in the transaction agreement and is set to retain Rio Tinto’s 33% stake in the JV.
Plans for a delisting tender offer may coincide with the mandatory tender offer but could be reassessed after the acquisition is finalised. The tender offers will adhere to Regulation 14E under the US Securities Exchange Act of 1934.
Furthermore, Rio Tinto and its affiliates may engage in purchasing CBA shares outside the US during the pending tender offer period, provided these actions comply with applicable regulations.
Earlier this month, Rio Tinto and BHP announced plans to jointly mine up to 200mt of iron ore from their adjacent Yandicoogina and Yandi sites in the Pilbara region of Western Australia.
