METALS MEGADEALS; ALCOA REVEALS PLAN TO BUY REYNOLDS FOR $5.6 BILLION AFTER FOREIGN RIVALS REVEAL THEIR OWN MERGER TALKS.Byline: Paula Story Associated Press Associated Press: see news agency. Associated Press (AP) Cooperative news agency, the oldest and largest in the U.S. and long the largest in the world. Alcoa Inc., the world's largest aluminum company, went public with an offer to buy No. 3 Reynolds Metals Reynolds Metals Company (RMC) was the second largest aluminum company in the United States, and the third largest in the world. The company became well-known for the consumer product Reynolds Wrap as well as being a leader in developing and promoting new uses for aluminum; Co. for $5.6 billion in cash and stock just hours after three foreign aluminum rivals announced a deal that would catapult them to the No. 1 ranking. Alcoa and Reynolds would have a combined revenue of about $21 billion, rivaling the new marriage of Alusuisse-Lonza (Algroup) of Switzerland, Pechiney of France and Alcan Aluminium of Canada, which have combined revenue of $21.6 billion. In disclosing the offer Wednesday, Alcoa said it had been pursuing Reynolds since March 22 and was trying to get its rival to negotiate a deal. It asked for an answer by Monday or it would consider other options for closing a deal, presumably pre·sum·a·ble adj. That can be presumed or taken for granted; reasonable as a supposition: presumable causes of the disaster. including taking a hostile offer directly to Reynolds' shareholders. Reynolds, based in Richmond, Va., said in a terse Terse - Language for decryption of hardware logic. ["Hardware Logic Simulation by Compilation", C. Hansen, 25th ACM/IEEE Design Automation Conf, 1988]. statement that its board would consider the offer Sunday and that it would have no further comment until after the close of business Monday. But shareholders were betting on a bigger bid, sending Reynolds shares above the $65-a-share offer from Alcoa, in part because some analysts have a significantly higher value of Reynolds. The flurry of activity in the rather staid staid adj. 1. Characterized by sedate dignity and often a strait-laced sense of propriety; sober. See Synonyms at serious. 2. aluminum industry was not surprising in a world that is increasingly made up of megacompanies in such industries as oil and automobiles, said Ilker Baybars, senior deputy dean at the Carnegie Mellon Graduate Business School in Pittsburgh. Such combinations are aimed at keeping the surviving companies competitive by cutting costs, through reducing the work force, and in improving productivity. No plans for job cuts were immediately announced by Alcoa. The combination of Alcan and the Swiss and French aluminum makers is coming about because ``they're really nervous about losing their share to the U.S. in global markets,'' Baybars said. He said Pittsburgh-based Alcoa simply wants to hold on to its No. 1 position. ``If they acquire Reynolds they will maintain that,'' Baybars said. A combination of Alcoa and Reynolds would unite companies that make the basic building blocks for products ranging from automobiles, appliances and airplanes to beer and soft-drink cans. Alcoa had $15.3 billion in revenue last year. With operations in 31 countries, it is the world's largest producer of alumina alumina (əl  `mĭnə) or aluminum oxide, Al2O3, chemical compound with m.p. about 2,000°C; and sp. gr. about 4.0. , the
principal ingredient in aluminum.
Reynolds, with $5.9 billion in revenue last year, has operations in 24 countries and is best known for Reynolds Wrap aluminum foil Noun 1. aluminum foil - foil made of aluminum aluminium foil, tin foil foil - a piece of thin and flexible sheet metal; "the photographic film was wrapped in foil" . But it also sells consumer products such as plastic wrap and wax paper. Some analysts said Alcoa's offer - as well as the European merger that would come in the form of a share-swap arrangement - could face significant regulatory hurdles. Alcoa first approached Reynolds in March but made its offer public Wednesday in a ``Dear Jerry'' letter to Reynolds' chief executive, Jeremiah J. Sheehan, from Alcoa's CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. , Alain J.P. Belda. The unusual tactic came just as analysts were absorbing the announcement of a three-way deal joining Alcoa's European rivals in a pact that would have placed the trio as an undisputed world leader in aluminum. ``At the beginning of June you stated publicly Reynolds' intention to `look at significant growth that can be achieved through merger and acquisition activity,' '' Belda wrote Sheehan. ``You further indicated your belief that our industry `is moving toward global consolidation' in which Reynolds plans to participate. ``We think those views are entirely congruent con·gru·ent adj. 1. Corresponding; congruous. 2. Mathematics a. Coinciding exactly when superimposed: congruent triangles. b. with our prior proposal and with our continued desire to negotiate a combination of our two companies using Alcoa common shares as the principal currency of exchange.'' Alcoa offered $65 in cash for about half of Reynolds' shares and the equivalent value in Alcoa shares for the rest of the stock. Belda indicated a willingness to negotiate an all-stock deal. The $65 offer represented a 16 percent premium over Reynolds' closing price Tuesday. By the time trading ended Wednesday on the New York Stock Exchange New York Stock Exchange (NYSE) World's largest marketplace for securities. The exchange began as an informal meeting of 24 men in 1792 on what is now Wall Street in New York City. , Reynolds was up 16.8 percent, or by $9.3750, at $65.25 a share as one of the most active issues. Analysts said with Reynolds' stock already exceeding the offer, traders likely were betting there would be a sweetened sweet·en v. sweet·ened, sweet·en·ing, sweet·ens v.tr. 1. To make sweet or sweeter by adding sugar, honey, saccharin, or another sweet substance. 2. To make more pleasant or agreeable. deal, either negotiated or through a hostile bid by Alcoa. Alcoa spokeswoman Bonita Bonita (Spanish and Portuguese for "beautiful") is the name of:
Alcoa rose 4.4 percent to close with a gain of $2.9375 at $69.375 a share on the NYSE NYSE See: New York Stock Exchange . CAPTION(S): 3 Photos PHOTO (1--Color) no caption (Assorted consumer products made by Alcoa Inc. and Reynolds Metals Co.) Associated Press (2--Color) SHEEHAN (3--Color) BELDA |
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