Arconic Corporation (NYSE: ARNC) (“Arconic” or the “Company”)
announced today that it has entered into a definitive agreement to
be acquired by funds managed by affiliates of Apollo Global
Management, Inc. (NYSE: APO) (“Apollo”), in an all-cash transaction
that values the Company at an enterprise value of approximately
$5.2 billion. The transaction includes a minority investment from
funds managed by affiliates of Irenic Capital Management
(“Irenic”).
The agreement provides that Arconic shareholders will receive
$30.00 per share in cash, which represents a premium of
approximately 36% to the Company's undisturbed closing stock price
on February 27, 2023. Upon completion of the transaction, Arconic's
shares will no longer trade on the New York Stock Exchange, and
Arconic will become a private company.
“This transaction represents a realization of value for Arconic
shareholders at a meaningful premium and enables the Company to
execute its long-term strategic vision. We are pleased to reach
this agreement with Apollo,” said Fritz Henderson, Chairman of the
Arconic Board of Directors. “The Board decided to approve this
transaction after thorough and thoughtful review of a range of
value creation opportunities for shareholders.”
Tim Myers, Chief Executive Officer, said, “In the more than
three years since we became a standalone company, we have shown the
capabilities and potential of Arconic’s employees and assets. Our
unique product portfolio in an industry with significant potential
for growth across the markets we serve positions us to deliver
substantial value to our customers and the end users of our
products. This transaction will provide Arconic with the backing of
one of the world’s premier investment firms and will allow us to
leverage Apollo’s industry expertise and relationships to pursue
our long-term strategic goals. I look forward to working with their
team to create opportunities for our employees and provide value to
our customers.”
“Arconic’s talented management team and employees operate a set
of premier global assets serving markets that are growing. We are
committed to investing significant capital in the Company to secure
its competitive position and world-class product offering to
continue building on Arconic’s journey,” said Gareth Turner,
Partner at Apollo Global Management.
Strategic investments are expected to include:
1. Upgrades to key machine centers to maximize the full
potential of the Company’s unique production capabilities
2. Technology upgrades to bring the Company’s plants and process
controls to state-of-the-art standards
3. Investments in projects that will provide for a cleaner
environment in the communities in which the Company operates
Mr. Turner also commented, “As aluminum continues to win share
in markets seeking sustainable, high-performing material across a
wide variety of applications, we believe there is a strong runway
for growth in markets throughout the world. We are looking forward
to supporting Arconic’s experienced team with our resources and
knowledge in the sector to help the Company achieve its long-term
goals.”
Itai Wallach, Partner at Apollo, commented, “We have tremendous
respect for Arconic and its people and are fully committed to
continuing Arconic’s unwavering support for its employees
throughout the world through a strong culture of employee
engagement, respecting and protecting the collective bargaining
process and by focusing on strengthening the security of the
Company’s pension plans, such that the Company’s commitments remain
secure. We look forward to partnering with the Company in its next
phase of growth.”
Approvals and Timing
The transaction is expected to close in the second half of 2023,
subject to customary closing conditions, including approval by
Arconic shareholders and receipt of regulatory approvals.
Arconic First Quarter 2023 Results
In a separate press release issued today, Arconic announced its
financial results for the first quarter ended March 31, 2023. A
copy of that press release is accessible by visiting the Investor
Relations section of the Company’s website. In light of the
announced transaction, Arconic has cancelled the earnings
conference call previously scheduled for today.
Advisors
Evercore Group L.L.C. and Goldman Sachs & Co. LLC are
serving as financial advisors to Arconic, and Wachtell, Lipton,
Rosen & Katz is serving as legal counsel to Arconic.
Paul, Weiss, Rifkind, Wharton & Garrison LLP is serving as
legal counsel to the Apollo Funds.
Willkie Farr & Gallagher LLP and Lowenstein Sandler LLP are
serving as legal counsel to Irenic.
J.P. Morgan Securities LLC and Wells Fargo Securities, LLC are
acting as co-lead financial advisors to Apollo. BMO Capital
Markets, Mizuho Securities USA LLC and TD Securities are also
serving as financial advisors to Apollo.
Additional Information About the Proposed Transaction and
Where to Find It
This release relates to the proposed transaction involving
Arconic Corporation (the “Company”).
In connection with the proposed transaction, the Company will file
relevant materials with the U.S. Securities and Exchange Commission
(the “SEC”), including the Company’s
proxy statement on Schedule 14A (the “Proxy
Statement”). This release is not a substitute for the Proxy
Statement or for any other document that the Company may file with
the SEC and send to its stockholders in connection with the
proposed transaction. The proposed transaction will be submitted to
the Company’s stockholders for their consideration. BEFORE MAKING
ANY VOTING DECISION, THE COMPANY’S STOCKHOLDERS ARE URGED TO READ
ALL RELEVANT DOCUMENTS FILED OR TO BE FILED WITH THE SEC, INCLUDING
THE PROXY STATEMENT, AS WELL AS ANY AMENDMENTS OR SUPPLEMENTS TO
THOSE DOCUMENTS, WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL
CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED TRANSACTION.
The Company’s stockholders will be able to obtain a free copy of
the Proxy Statement, as well as other filings containing
information about the Company, without charge, at the SEC’s website
(www.sec.gov). Copies of the Proxy Statement and the filings with
the SEC that will be incorporated by reference therein can also be
obtained, without charge, by directing a request to Arconic
Corporation, 201 Isabella Street, Suite 400, Pittsburgh,
Pennsylvania, 15212-5872, Attention: Investor Relations; telephone
(412) 315-2984, or from the Company’s website at
www.arconic.com/sec-filings.
Participants in the Solicitation of Proxies
The Company and certain of its directors, executive officers and
employees may be deemed to be participants in the solicitation of
proxies in respect of the proposed transaction. Information
regarding the Company’s directors and executive officers is
available in the Company’s definitive proxy statement for its 2023
annual meeting of stockholders, which was filed with the SEC on
April 5, 2023, the Company’s Annual Report on Form 10-K for the
year ended December 31, 2022, which was filed with the SEC on
February 21, 2023, and in other documents filed by the Company with
the SEC. These documents can be obtained free of charge from the
sources indicated above. Other information regarding the
participants in the proxy solicitation and a description of their
direct and indirect interests, by security holdings or otherwise,
will be contained in the Proxy Statement and other relevant
materials to be filed with the SEC in connection with the proposed
transaction when they become available. Free copies of the Proxy
Statement and such other materials may be obtained as described in
the preceding paragraph. Investors should read the Proxy Statement
carefully when it becomes available before making any voting or
investment decisions.
Forward-Looking Statements and Information
This release contains statements that relate to future events
and expectations and, as such, constitute forward-looking
statements within the meaning of the Private Securities Litigation
Reform Act of 1995. Forward-looking statements include those
containing such words as “anticipates,” “believes,” “could,”
“estimates,” “expects,” “forecasts,” “goal,” “guidance,” “intends,”
“may,” “outlook,” “plans,” “projects,” “seeks,” “sees,” “should,”
“targets,” “will,” “would,” or other words of similar meaning. All
statements that reflect the Company’s expectations, assumptions,
projections, beliefs or opinions about the future, other than
statements of historical fact, are forward-looking statements,
including, without limitation, statements, relating to the
condition of, or trends or developments in, the ground
transportation, aerospace, building and construction, industrial,
packaging and other end markets; the Company’s future financial
results, operating performance, working capital, cash flows,
liquidity and financial position; cost savings and restructuring
programs; the Company’s strategies, outlook, business and financial
prospects; share repurchases; costs associated with pension and
other post-retirement benefit plans; projected sources of cash
flow; potential legal liability; the impact of inflationary price
pressures; and the potential impact of public health epidemics or
pandemics, including the COVID-19 pandemic. These statements
reflect beliefs and assumptions that are based on the Company’s
perception of historical trends, current conditions and expected
future developments, as well as other factors the Company believes
are appropriate in the circumstances. Forward-looking statements
are not guarantees of future performance, and actual results may
differ materially from those indicated by these forward-looking
statements due to a variety of risks, uncertainties and changes in
circumstances, many of which are beyond the Company’s control. Such
risks and uncertainties include, but are not limited to: (i)
continuing uncertainty regarding the impact of the COVID-19
pandemic on our business and the businesses of our customers and
suppliers; (ii) deterioration in global economic and financial
market conditions generally; (iii) unfavorable changes in the end
markets we serve; (iv) the inability to achieve the level of
revenue growth, cash generation, cost savings, benefits of our
management of legacy liabilities, improvement in profitability and
margins, fiscal discipline, or strengthening of competitiveness and
operations anticipated or targeted; (v) adverse changes in discount
rates or investment returns on pension assets; (vi) competition
from new product offerings, disruptive technologies, industry
consolidation or other developments; (vii) the loss of significant
customers or adverse changes in customers’ business or financial
condition; (viii) manufacturing difficulties or other issues that
impact product performance, quality or safety or timely delivery;
(ix) the impact of pricing volatility in raw materials and
inflationary pressures on our costs of production, including
energy; (x) a significant downturn in the business or financial
condition of a key supplier or other supply chain disruptions; (xi)
challenges to or infringements on our intellectual property rights;
(xii) the inability to successfully implement or to realize the
expected benefits of strategic initiatives or projects; (xiii) the
inability to identify or successfully respond to changing trends in
our end markets; (xiv) the impact of potential cyber attacks and
information technology or data security breaches; (xv)
geopolitical, economic, and regulatory risks relating to our global
operations, including compliance with U.S. and foreign trade and
tax laws and other regulations, potential expropriation of
properties located outside the U.S., sanctions, tariffs, embargoes,
and renegotiation or nullification of existing agreements; (xvi)
the outcome of contingencies, including legal proceedings,
government or regulatory investigations, and environmental
remediation and compliance matters; (xvii) the impact of the
ongoing conflict between Russia and Ukraine on economic conditions
in general and on our business and operations, including sanctions,
tariffs, and increased energy prices; (xviii) the timing, receipt
and terms and conditions of any required governmental and
regulatory approvals of the proposed transaction that could reduce
anticipated benefits or cause the parties to abandon the proposed
transaction; (xix) the occurrence of any event, change or other
circumstances that could give rise to the termination of the merger
agreement entered into pursuant to the proposed transaction; (xx)
the possibility that the Company’s stockholders may not approve the
proposed transaction; (xxi) the risk that the parties to the merger
agreement may not be able to satisfy the conditions to the proposed
transaction in a timely manner or at all; (xxii) risks related to
disruption of management time from ongoing business operations due
to the proposed transaction; (xxiii) the risk that any
announcements relating to the proposed transaction could have
adverse effects on the market price of the Company’s common stock;
(xxiv) the risk of any unexpected costs or expenses resulting from
the proposed transaction; (xxv) the risk of any litigation relating
to the proposed transaction; (xxvi) the risk that the proposed
transaction and its announcement could have an adverse effect on
the ability of the Company to retain customers and retain and hire
key personnel and maintain relationships with customers, suppliers,
employees, stockholders and other business relationships and on its
operating results and business generally; and (xxvii) the other
risk factors summarized in the Company’s Annual Report on Form 10-K
for the year ended December 31, 2022 and other documents filed by
the Company with the SEC. The above list of factors is not
exhaustive or necessarily in order of importance. Market
projections are subject to the risks discussed above and in this
release, and other risks in the market. The statements in this
release are made as of the date set forth above, even if
subsequently made available by the Company on its website or
otherwise. The Company disclaims any intention or obligation to
update any forward-looking statements, whether in response to new
information, future events, or otherwise, except as required by
applicable law.
About Arconic Corporation
Arconic Corporation (NYSE: ARNC), headquartered in Pittsburgh,
Pennsylvania, is a leading provider of aluminum sheet, plate, and
extrusions, as well as innovative architectural products, that
advance the ground transportation, aerospace, building and
construction, industrial and packaging end markets. For more
information: www.arconic.com.
About Apollo
Apollo is a high-growth, global alternative asset manager. In
our asset management business, we seek to provide our clients
excess return at every point along the risk-reward spectrum from
investment grade to private equity with a focus on three investing
strategies: yield, hybrid, and equity. For more than three decades,
our investing expertise across our fully integrated platform has
served the financial return needs of our clients and provided
businesses with innovative capital solutions for growth. Through
Athene, our retirement services business, we specialize in helping
clients achieve financial security by providing a suite of
retirement savings products and acting as a solutions provider to
institutions. Our patient, creative, and knowledgeable approach to
investing aligns our clients, businesses we invest in, our
employees, and the communities we impact, to expand opportunity and
achieve positive outcomes. As of December 31, 2022, Apollo had
approximately $548 billion of assets under management. To learn
more, please visit www.apollo.com.
About Irenic
Irenic Capital Management was formed in 2021. The firm invests
across the capital structure in unique special situation
opportunities. To learn more, please visit www.irenicmgmt.com.
Dissemination of Company Information
Arconic intends to make future announcements regarding Company
developments and financial performance through its website at
www.arconic.com.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20230503006038/en/
Investor Contact Shane Rourke (412) 315-2984
Investor.Relations@arconic.com
Media Contact Tracie Gliozzi (412) 992-2525
Tracie.Gliozzi@arconic.com
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