Giants Set To Move In As Alcan Sale Looms
The Age
Tuesday March 29, 1994
Sydney.
The world's main aluminium companies along with institutional investors are vying for control of Alcan Australia following a decision by its parent, Alcan Aluminium of Canada, to sell its controlling interest.
US groups such as Aluminum Co of America, Reynolds Metals Company, Kaiser Aluminium and Chemical Corp together with France's Pechiney are all believed to have expressed interest in the company.
The interest follows the Canadian company announcing this month that its 73.3 per cent stake in Alcan Australia was under review as part of a worldwide rationalisation.
Although the parent is yet to commit to a sale, it is expected that the stake in the offshoot will be unloaded as part of its new strategy of concentrating on upstream businesses in America and Europe.
After the parent unofficially placed Alcan Australia on the market, the local company's share price rose to a peak of $2.50 last week before drifting back to close at $2.35 yesterday.
The decision to get rid of the downstream business comes at a time when Alcan Australia is in recovery, having trimmed costs and improved cashflow.
With the Australian market clearly on the rebound and 50 per cent of Alcan's finished products finding markets in Asia, Alcan Australia is being seen by the aluminium giants as a natural springboard for growth in this region.
Alcan Australia's shareholders were only given sketchy details of their company's future at the annual meeting in Sydney yesterday.
The chairman, Professor Jeremy Davis, said the future depended on whether the parent sold its stake but a review of core strategies was being undertaken because of a possible sale.
However, he said, Alcan would not change its strategic direction in any significant way in the next two years.
Meanwhile, the company said it had achieved a 10 per cent reduction in primary metal output from its Kurri Kurri smelter with only a minimal impact on employment. The decision to reduce output was taken in February after world producers agreed to cut production in attempt to induce a recovery in the metal's price.
© 1994 The Age