Jul 16, 2018

Arconic gets takeover interest, as tariffs take toll

Dan Primack, author of Pro Rata

Apollo Global Management is among several firms to have expressed interest in buying Arconic, the aeronautics parts-maker that was known as Alcoa before a 2016 breakup.

Why it's a big deal: Because Arconic was the subject of a very contentious proxy battle last year with Elliott Management, which resulted in the ouster of CEO Klaus Kleinfeld and a board revamp. But the CEO swap hasn't helped Arconic's stock price, which has fallen 36% so far this year — partially due to a tariff-fueled rise in aluminum prices.

Size: Arconic has a current market cap of around $8.3 billion, plus $6.4 billion in debt.

Bottom line: "Should there be a deal, it would be the latest in a string of double-digit-billion leveraged buyouts from the likes of Blackstone, KKR and Carlyle Group. LBOs are on pace for their busiest year by dollar volume since 2007, according to Dealogic." — Miriam Gottfried & Dana Cimilluca, WSJ

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