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PITTSBURGH and ATLANTA--March 9, 1998--
Alcoa (NYSE: AA) and Alumax Inc. (NYSE: AMX) today announced they have
entered into a definitive agreement under which Alcoa will acquire all
outstanding shares of Alumax for a combination of cash and stock.
Alcoa will commence the transaction with a cash tender offer for
one-half the outstanding Alumax shares at $50.00 per share. The second
step will be a merger in which each remaining outstanding Alumax share
will be converted into 0.6975 of a share of Alcoa common stock. Based on
the March 4, 1998 closing price of Alcoa common stock, the transaction
is valued at approximately $3.8 billion, including the assumption of
debt. It is intended that the Alcoa shares to be issued in the second
step merger will be tax-free to Alumax shareholders.
The combined company will have about 100,000 employees. It will operate
in 250 locations in 30 countries with estimated 1998 revenues of $17.0
billion.
In announcing the transaction. Allen Born, chairman and chief executive
officer of Alumax, and Paul H. O'Neill, chairman and chief executive
officer of Alcoa, said: "We are very pleased to announce this merger. It
brings together two companies whose activities are very complementary
which will benefit customers, employees and shareholders.
"This combination will create economic efficiency for customers by
saving cost overlaps in management, marketing, transportation and
research and development while gaining additional new value through the
combined technology and operating know-how of the employees."
Both companies' Boards of Directors have approved the tender offer,
which is expected to commence Friday, March 13, 1998. It will be
conditioned on the expiration of antitrust waiting periods and other
customary conditions. The merger, which has also been approved by the
Board of Directors of each company, is subject to certain additional
conditions, including approval by stockholders of Alumax owning a
majority of the Alumax shares and other customary conditions. The
stockholders meeting to consider the merger is expected to be held in
the second quarter with a merger closing expected shortly thereafter.
BT Wolfensohn is serving as financial advisor to Alumax and has rendered
a fairness opinion to Alumax's Board of Directors with respect to the
proposed transaction. Credit Suisse First Boston Corporation is serving
as financial advisor to Alcoa and will act as dealer manager in the
tender offer.
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