Alcoa board gives nod to split

The Alcoa Inc's board approved the company's decision to split the US aluminum giant into two independent, publicly traded firms.

Arconic will provide high-performance materials and engineered products to the aerospace, automotive and other industries, while Alcoa Corp will offer bauxite, alumina and aluminum products.

The split is scheduled to become effective on November 1, the company said in a release.

"Upon separation, Klaus Kleinfeld will serve as Arconic chairman and CEO. Michael Morris will become non-executive chairman of Alcoa Corporation and Roy Harvey, current group president of the Alcoa Global Primary Products business, will be its CEO."

Alcoa said that the separation will occur by means of a pro rata distribution by Alcoa Inc of 80.1% of the outstanding common stock of Alcoa Corporation. Arconic will retain 19.9% of Alcoa Corporation common stock.

The distribution is intended to qualify as a tax-free transaction to Alcoa Inc shareholders for US federal income tax purposes, the release said.

Both the value-add and upstream companies will be based in the US.

Alcoa's assets include operations in Brazil, Suriname and Jamaica. The company anticipates 8-9% growth in global aerospace sales this year, driven by robust demand for large commercial aircraft and jet engines.