Current Capital’s Jonathan Foster Retained as Expert Witness on behalf of Alcoa in Legal Fight with Australian Partner Alumina related to Corporate Spin-Off

Wall Street Journal (September 2016) – Alcoa Inc. and joint-venture partner Alumina Ltd. have settled their dispute, ending competing litigation and removing a potential hurdle to Alcoa’s plans to split into two new companies later this year.

New York-based Alcoa and Melbourne, Australia-based Alumina have been in business together since the 1960s, with Alcoa owning 60% of Alcoa World Alumina and Chemicals, or AWAC, and Alumina holding the rest. AWAC is the world’s biggest producer of alumina and the largest bauxite miner.

Alcoa last year announced plans to change its name to Arconic and focus on engineering parts for aerospace and automotive businesses, and to split off a new company, Alcoa Corp., which will house the company’s traditional mining, smelting and refining divisions. The move is largely in response to declining aluminum prices and stiffer competition from lower-cost producers, led by China.

Alumina grew concerned over how Alcoa’s plans to split would affect their joint venture. Alumina was worried, among other concerns, about potentially having to bear a hefty share of the spinoff Alcoa’s liabilities once the company goes through its transformation.

There has been a diverging performance in recent times between Alcoa’s ailing traditional metals business, which has closed plants and reported falling revenues, and its more profitable engineered-products business that will form the core of Arconic, which will make everything from lightning-resistant fasteners for airplanes to truck wheels.

The partners held a series of meetings that resulted in a lawsuit brought by Alcoa against its Australian partner. Alumina in June filed a counterclaim that aimed to block Alcoa’s planned split without its consent.

Thursday, the companies said in a joint news release they had revised their joint-venture agreement to both their satisfaction and that they had in turn decided to end their litigation.