Mergers & Acquisitions

Alcoa completes acquisition of RTI International Metals, increases titanium capabilities

Alcoa acquires RTI International Titanium

Aluminum industry pioneer, Alcoa Inc., has completed the acquisition of RTI International Metals, a world leader in titanium and specialty metal products and services for the defense, energy, medical device and aerospace markets. The acquisition advances Alcoa’s lightweight and advanced materials manufacturing capabilities and technologies. The merger was announced on March 9 and was completed on July 23.

Under the terms of the merger agreement, each share of RTI common stock has been converted into the right to receive 2.8315 shares of Alcoa common stock, plus an amount of cash in lieu of fractional shares of Alcoa common stock.

With the RTI acquisition, Alcoa expands its reach into titanium—the world’s fastest-growing aerospace metal—and adds advanced technologies and materials capabilities for greater innovation power in aerospace and beyond. RTI owns advanced manufacturing and materials technologies including high velocity machining, forming, extruding and parts assembly operations that enable larger and more complex aerospace components.

RTI complements Alcoa’s mid and downstream value chain and positions Alcoa as the leading provider of aerospace solutions. RTI’s technologies enable a value creating closed titanium scrap loop for Alcoa. Klaus Kleinfeld, Alcoa Inc.’s chairman and chief executive officer, said that “By combining the talent and advanced technology of RTI and Alcoa, we significantly increase Alcoa’s aerospace market reach. Through this and our other investments and innovations, we are positioning the company to capture even more profitable growth and create greater sustainable value for our customers, employees and shareholders.”

Eighty percent of RTI’s revenues in 2014 were from the aerospace and defense industries. The merger allows Alcoa to capitalize on the growth of the industry and extend its aerospace market reach. With RTI, Alcoa’s 2014 pro forma aerospace revenue increases by 13% to USD 5.6 billion. Alcoa expects global aerospace sales growth of 8 to 9% in 2015.

RTI is being integrated as a standalone business unit into Alcoa’s downstream Engineered Products and Solutions (EPS) segment. The new business unit, called Alcoa Titanium & Engineered Products (ATEP), will be led by Eric Roegner who has been named president of ATEP, effectively immediately. In addition, Roegner continues as chief operating officer of Engineered Products and Solutions with responsibility for ATEP and Alcoa Power and Propulsion, and president of Alcoa Defense.

Alcoa has been expanding its business in aerospace aggressively with acquisitions like Firth Rixson in 2014 and TITAL in March this year. Firth Rixson is a global jet component manufacturer, while TITAL produces aluminum and titanium structural castings for airframes and aircraft engines. The merger with RTI Intenational Metals accelerates Alcoa Inc.’s transformation for broader applications and further builds the latter’s value added portfolio of products made of titanium, nickel and aluminum.

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