SYDNEY — Aluminum producer Alcoa has agreed to an all-stock deal to acquire Australia’s Alumina that values its equity at some 3.35 billion Australian dollars (US$2.20 billion).

Pittsburgh-based Alcoa
AA,
-4.43%

is offering 0.02854 of its own stock for each Alumina
AWC,
+6.86%

share, representing a 13% premium to Alumina’s closing share price on Friday. Alumina said it recommends shareholders vote in favor of the offer, which comes after a number of previous bids by Alcoa were rejected.

Alcoa said it has reached an agreement with fund manager Allan Gray Australia that gives it the right to buy up to 19.9% of Alumina.

Alumina owns a 40% stake in Alcoa World Alumina & Chemicals, or AWAC, a joint venture with Alcoa that runs bauxite mining, alumina refining and aluminum smelting operations.

“Alcoa has been a proven operator of AWAC, and we recognize the value creation opportunities possible under a simplified ownership structure,” said William F. Oplinger, Alcoa’s president and chief executive.



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