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Alcoa-Alcan Consortium Withdraws Bid for Venezuelan Aluminum Sector
PITTSBURGH--March 16, 1998--
March 16, 1998
Mr. Alberto Poletto
Mr. Elias Ynaty
Alcoa and Alcan today advised the Venezuelan government that they are
not going to bid for the Venezuelan aluminum industry assets. Below is
the text of the letter:
Re: Aluminum Sector Privatization
This is to inform you that the Alcoa-Alcan consortium will decline to
submit a bid for the privatization of the Venezuelan aluminum industry.
The minimum bid price published on Friday, March 13, 1998, coupled with
the deterioration in the Companies' performance over the last 12 months,
increased energy prices and operating costs, make this opportunity
incompatible with our shareholders' objectives of pursuing investments
that return the cost of capital. In addition, the acquisition agreements
fail to provide the legal certainty to be expected in a commercial
We regret having reached this conclusion, as we believe we could have
offered the government and people of Venezuela a relationship with
global aluminum industry leaders with a proven record of technology,
management and social responsibility. Both Alcoa and Alcan are convinced
that, under our leadership, the Venezuelan aluminum industry could grow
and prosper for the benefit of the country and people of Guayana.
If, for any reason, the terms and conditions for the privatization
change, we stand ready to continue our discussions with you on acquiring
and operating these important assets.
Aluminum Company of America
Alcan Aluminium Limited