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December 31, 2004
Alcoa Receives Final Approvals from the Russian Government To Acquire Samara and Belaya Kalitva Fabricating Facilities from Rusal
NEW YORK--(BUSINESS WIRE)--Dec. 31, 2004--Alcoa (NYSE:AA) today announced that it has received final approvals from the Government of the Russian Federation to proceed with its purchase of RUSAL's controlling interests in two fabricating facilities in Samara and Belaya Kalitva in the Russian Federation.
The approvals follow upon an understanding between Alcoa and the Federal Anti-Monopoly Service (FAS) resulting in an FAS private ruling on behavioral conditions to ensure that Alcoa complies with various legal requirements and notification obligations. In addition, Alcoa reached an agreement with a state owned procurement company guaranteeing that Alcoa will maintain the capability to supply certain Russian domestic needs through continued production at the two facilities. An Executive Order issued on December 22, 2004 allowed the agreement to be finalized and the behavioral conditions to be issued. These documents ensure the national interests of the Russian Federation have been addressed while also providing an additional legal framework for Alcoa's investment.
With the final government approvals in place, Alcoa and Rusal are taking the necessary steps to complete the transaction. Terms of the transaction will be disclosed when the deal has been completed, which is expected at the end of January 2005.
"We welcome this decision by the Russian government," said Alain Belda, Alcoa Chairman and CEO. "We have had good and productive consultations with the Russian government throughout this process and we are encouraged by this opportunity to invest in Russia. We are pleased that we have addressed the Russian government's concerns about the role these plants play in supporting domestic production and infrastructure needs. And we believe that the final working arrangements will protect both Alcoa's interests and those of the Russian Government. We look forward to continuing to work with both federal and local government officials as we expand our presence in Russia."
"The decision is an important step forward for both Alcoa and for RUSAL," said Alexander Bulygin, RUSAL's CEO. "For us, it means we can move ahead with our strategic focus on upstream and alloy production, and on expanding our raw materials access. We welcome Alcoa to Russia and anticipate continuing close relations in the future."
The Samara facility is located about 500 miles southeast of Moscow. It features cast house, flat rolled products, extrusion, and forging capabilities and serves customers in many markets, including transportation, packaging, and industrial products. The plant's production and quality control systems have been ISO 9001/9002 certified and is preparing for the ISO 14001 certification in Ecological Management.
The Belaya Kalitva facility is located about 500 miles south of Moscow. The facility also features cast house, flat rolled products, extrusions, tubes, and forgings capabilities. The Belaya Kalitva facility has specialized plate rolling and finishing equipment that will complement and increase Alcoa's present supply position. With Alcoa know how and management systems, the plant will not only be able to expand the product offerings for Russian customers but also will eventually be able to produce products for major customers in the west. The plant is ISO 9001 certified and is preparing for the ISO 14001 certification in Ecological Management.
As part of Alcoa, the two fabricating facilities will serve both the growing Russian market and global customers in Europe, Asia, and the Americas. The two facilities will join Alcoa's flat rolled products manufacturing system with operations in the U.S., Europe, Australia, China, and Brazil; the company's extrusion facilities in the U.S., Europe, Brazil, and Korea; and its wheels and forged products system with facilities in the U.S., Mexico, Japan and Europe. A team headed by Phil Collins, Alcoa Country Manager - Russia, has been organized to help facilitate the integration into Alcoa. Collins, who oversaw the successful integration of similar assets in Hungary into Alcoa, reports to Ric Belda, Executive Vice President European Region.
Alcoa is the world's leading producer and manager of primary aluminum, fabricated aluminum and alumina, and is active in all major aspects of the industry. Alcoa serves the aerospace, automotive, packaging, building and construction, commercial transportation and industrial markets, bringing design, engineering, production and other capabilities of Alcoa's businesses as a single solution to customers. In addition to aluminum products and components, Alcoa also markets consumer brands including Reynolds Wrap(R) aluminum foil, Alcoa(R) wheels, and Baco(R) household wraps. Among its other businesses are vinyl siding, closures, fastening systems, precision castings, and electrical distribution systems for cars and trucks. The company has 120,000 employees in 43 countries. For more information go to www.alcoa.com
RUSAL, a world leader in aluminium production was formed in March 2000 from the merger of a number of the largest smelters and other aluminium producers located in the CIS. The company accounts for 75% of Russia's primary aluminium output and 10% of the global primary aluminium output. RUSAL is a fully vertically integrated company with a complete production cycle from bauxite mining and the production of raw materials, to the production of primary metal, semi-products and aluminium-based end products. RUSAL is headquartered in Moscow.