Alcoa to split into two companies

NEW YORK -- Alcoa will split into two independent companies, one focused on aluminum production and the other on engineered products for the automotive and aerospace industries.

The Alcoa name will remain with the metals company that does mining, refining and aluminum production at 64 plants worldwide.

The company's announcement didn't specify locations for those upstream operations and their 17,000 employees, but Alcoa currently has significant production capacity in the province of Quebec.

The other company, yet to be named, will have 157 locations and 43,000 employees that will provide high-performance products. About 40 per cent of its revenues have come from the aerospace market.

Alcoa expects the split to be complete by the second half of 2016 and has scheduled a morning conference call to discuss details with analysts.

Alcoa chairman and CEO Klaus Kleinfeld will be chief executive of the engineer-products company and be chairman of both companies.

"In the last few years, we have successfully transformed Alcoa to create two strong value engines that are now ready to pursue their own distinctive strategic directions," Kleinfeld said in a statement.

"With the unanimous support of Alcoa's Board we now take the next step; launching two leading-edge companies, each with distinct and compelling opportunities, and each ready to seize the future."

The company has been shifting its focus to its more profitable automotive and aerospace products, which also involve titanium. It has been shutting down unprofitable aluminum smelters as a surplus of the material on the market weighs down prices and profit.

Earlier this month, Alcoa broadened a partnership with Ford Motor Co. through the use of a stronger form of aluminum for auto body parts. It also spent about $60 million to expand its three-dimensional manufacturing capabilities at a technical centre in the Pittsburgh area.

After initially rising, Alcoa's share price slipped back and was unchanged at $9.69 in in premarket trading about two hours ahead of the market open.

With files from The Associated Press