Apollo to take aerospace supplier Arconic private in $5.2 billion deal

Arconic Corp (ARNC.N) has agreed to be bought by Apollo Global Management Inc. (APO.N) in a take-private deal valued at about $5.2 billion, the US aerospace supplier said on Thursday.

Apollo will pay $30 for each Arconic share held, representing a premium of 35.6% as of close on Feb. 27, a day before reports of deal talks emerged.

Shares of Pittsburgh-based Arconic jumped 28.6% to $29 before the bell on Thursday.

The deal, which is expected to close in the second half of the year, has an equity value of about $3 billion, as per to calculations by Reuters.

The company, which supplies to Boeing Co (BA. N), had rebuffed an almost $10 billion offer from Apollo in 2018. Two years later, the company split into two publicly traded firms, Arconic Corp and Howmet Aerospace Inc. (HWM.N).

Arconic retained rolled products, aluminum extrusions, and building and construction systems business, while the engine products, fastening systems and forged wheels’ businesses were spun off to Howmet.

Arconic struggled with falling metal prices last year and its stock lost roughly 38% of its value.

"Aerospace production at Boeing and Airbus is accelerating, automotive production is experiencing less impact from supply chain issues, and aluminum can-sheet inventories will likely correct, making it (Arconic) an attractive entry point for a private equity investor," said Benchmark analyst Josh Sullivan.



Reuters