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Alcoa near $6 billion deal
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November 13, 2001: 1:35 p.m. ET
World's biggest aluminum producer in takeover bid of Australia's WMC.
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NEW YORK (CNNmoney) - Alcoa Inc. is nearing to a takeover of Australian mining company WMC Ltd. for up to $6 billion in cash and stock, a source familiar with the situation told CNNmoney.com.
Pittsburgh-based Alcoa, the world's largest aluminum producer, has been in talks with WMC for more than a month and a deal is expected soon, possibly within the week, the source said. WMC's board did meet Tuesday in Melbourne, Australia, to evaluate the Alcoa offer but the outcome was not known.
Alcoa is offering mainly cash, some stock and would assume some debt, the source said. The Wall Street Journal, which reported the talks Tuesday, said Alcoa is offering about $5.14 (10 Australian dollars) a share for WMC, valuing the Australian company at $5.8 billion-to-$6 billion.
Cash will comprise much of the bid, which may also include some stock and some debt, the source said. The WSJ reported that Alcoa would assume up to $1.5 billion in debt.
Alcoa declined to comment. Victoria, Australia-based WMC could not be reached for comment.
Shares of Alcoa (AA: up $1.51 to $36.20, Research, Estimates) climbed nearly 4 percent in afternoon trading Tuesday, while American depositary receipts (ADRs) for WMC (WMC: up $0.25 to $21.15, Research, Estimates) advanced modestly.
Alcoa already controls about half the world's alumina market, the Journal said, but added that a deal would give Alcoa far greater access to the Asian market.
Last summer, Alcoa Inc. and rival BHP Billiton agreed to combine their metals distribution units, creating a combined firm with over $2 billion in revenue.
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Alcoa and WMC jointly own Alcoa World Aluminum and Chemicals, whose main business is alumina, the main ingredient used to make aluminum, the newspaper reported. 
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