Pittsburgh-based Alcoa Corp. (NYSE: AA) is selling its rolling mill business near Evansville in a deal valued at nearly $700 million dollars. The company says it is divesting Alcoa Warrick LLC to Kaiser Aluminum Corp. (Nasdaq: KALU).
The plant in Newburgh employs 1,170 workers. There is no word on staffing levels, other than to say they will become employees of Kaiser once the deal is complete.
Alcoa says it will retain ownership of the smelter and power plant, which are located on the property. Those facilities employ 660 people.
Alcoa also plans to enter into a ground lease agreement with Kaiser for property that Alcoa will continue to own at the site.
The companies say the transaction is valued at approximately $670 million, which includes $587 million in cash and the assumption of $83 million in other postretirement employee benefit liabilities.
The rolling mill produces approximately 310,000 metric tons of flat-rolled aluminum annually for use in packaging, including food containers, aluminum cans, and bottles.
As part of the transaction, Alcoa says it will enter into a market-based metal supply agreement with Kaiser Aluminum.
Pending regulatory approval, the companies expect to close by the end of the first quarter of 2021.