NEW YORK--Alcoa (NYSE:AA) announced today that it has agreed to sell its wire harness and electrical distribution business to Platinum Equity, a California-based private equity group. The terms of the sale were not disclosed. The wire harness and electrical distribution business is the largest part of the Alcoa Electrical and Electronic Solutions business which the Company announced was for sale in January.
The transaction is expected to be completed by the end of the second quarter of 2009. The sale includes operations in 13 countries and involves approximately 17,500 employees.
The sale of the Electrical and Electronic Solutions business is part of a multi-pronged effort to focus on businesses where Alcoa brings strong technical and parental advantage. This initiative will provide better focus of resources on strategic businesses, improve financial performance and establish a strong foundation for growth.
Alcoa is in discussions with multiple parties on the sale of the remainder of the Electrical and Electronics business which consists of the electronics portion of the operation. That business has approximately 500 employees in three European countries. Alcoa expects to record a loss in discontinued operations in connection with the closing of the sale of the wire harness and electrical distribution business.
Platinum Equity was founded in 1995, and has a global portfolio of operating companies. During the past two years, Platinum has been actively pursuing investment in companies involved directly and indirectly in the automotive industry.
Certain statements in this release relate to future events and expectations and as such constitute forward-looking statements involving known and unknown risks and uncertainties that may cause actual results, performance or achievements of Alcoa to be different from those expressed or implied in the forward-looking statements. Forward-looking statements can be identified by the use of predictive or future-tense terminology, such as “anticipates,” “expects,” “should,” “will” or other similar words. Alcoa disclaims any intention or obligation to update publicly any forward-looking statements, other than as required by applicable law. Important factors that could cause actual results to differ materially from those in the forward-looking statements include: (a) uncertainties regarding the duration or severity of the current global economic downturn and disruptions in the financial markets, and their impact on Alcoa; (b) material adverse changes in aluminum industry conditions generally, including global supply and demand conditions; (c) fluctuations in commodity prices, especially the price of aluminum on the London Metal Exchange; (d) changes, including further deterioration, in the key markets served by Alcoa; (e) Alcoa’s inability to achieve the level of cost reductions, cash generation, return on capital improvement, or strengthening of operations anticipated by management in connection with its restructuring, portfolio streamlining and liquidity strengthening actions; (f) Alcoa’s inability to complete its Brazilian growth and portfolio streamlining projects as planned or by targeted completion dates; (g) unfavorable changes in laws, governmental policies, foreign currency exchange rates or competitive factors in the countries in which Alcoa operates; (h) significant legal proceedings or investigations adverse to Alcoa; and (i) the other risk factors described in Alcoa’s Form 10-K for the year ended December 31, 2008, Form 10-Q for the quarter ended March 31, 2009, and other reports filed with the Securities and Exchange Commission.