CHICAGO – Alcoa Inc (AA.N) said Monday it will break itself in two, separating its faster growing business manufacturing parts for planes and automobiles from its traditional aluminum smelting operations as shareholders seek higher returns amid a commodity slump.
Pressured by a 42 percent drop in its share price this year and a surge in Chinese aluminum exports, Alcoa is splitting into two publicly traded companies focusing on smelting and higher-tech products. It is joining a wave of major corporations which this year have divested business to add shareholder value.
Alcoa shares jumped 2.4 percent to $9.29 as analysts applauded its intensified focus on products for expanding businesses like aerospace and auto.
The stock surge made the 127-year-old company the biggest percentage gainer on the benchmark S&P 500 index.
The global glut of aluminum, which has depressed prices, has battered Alcoa stock, driving the company’s market value this year down to about $12 billion.