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Kaiser to Acquire Warrick Rolling Mill from Alcoa

Alcoa sold its Warrick rolling mill to Kaiser Aluminum

Kaiser Aluminum Corporation entered into a definitive agreement to purchase Alcoa Warrick LLC from Alcoa Corporation for $670 million. This acquisition includes all of the Warrick rolling assets, comprising the casthouse, hot mill, cold mills, and coating and slitting lines.

Located near Evansville, Indiana, Warrick produces about 310,000 tonnes of rolled aluminum per year, with a strong position in the packaging sector. This will enable Kaiser to enter the North American packaging industry — a growing end market driven by sustainability trends and the secular shift from plastic to aluminum in the packaging industry. Capacity for beverage and food can stock has shifted from packaging into other end markets resulting in favorable supply/demand dynamics.

“With Warrick’s solid market position, highly favorable market dynamics, and a strong and culturally compatible management team, the acquisition provides us an opportunity to significantly enhance and diversify our portfolio,” said Keith A. Harvey, president and CEO of Kaiser. “The addition of a non-cyclic packaging business is highly complementary to our existing aerospace, automotive, and general engineering cyclic end markets and provides excellent opportunities for long-term growth and synergy with our existing operations.”

The rolling business is located at Alcoa’s Warrick Operations, an integrated manufacturing site where Alcoa will retain ownership of the 269,000 tpy smelter and power plant. Following the closure of the acquisition, Alcoa will lease the land for the rolling business to Kaiser and will enter into a metal supply agreement, providing aluminum to the rolling operations.

“The sale will achieve a key target in our strategy to focus on core markets while generating additional cash,” said Roy Harvey, president and CEO of Alcoa. “We look forward to having Kaiser Aluminum as a valued customer at Warrick Operations, and we thank all of the employees who have contributed significantly to the site’s 60-year history of manufacturing excellence.”

The acquisition is expected to close in the first quarter of 2021.

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