By Rhiannon Hoyle


Aluminum Corp. of China and Rio Tinto agreed to buy a majority stake in Companhia Brasileira de Aluminio for about $900 million.

Chinalco subsidiary Chalco and Rio Tinto will acquire the nearly 69% stake in CBA from Brazilian conglomerate Votorantim for roughly 4.69 billion reais, equivalent to $903.5 million. The shareholding will be bought via a joint venture that will be 67% owned by the Chinese metals giant, the acquirers said in separate statements Friday.

The purchase comes amid a pickup in dealmaking in the metals and mining industry, as both Chinese and Western companies seek to expand their footprints through acquisitions.

Aluminum is expected to face a shortage in the coming years, as demand rises and new smelters become more difficult to build. The metal is widely used in the manufacturing of electric vehicles, jet engines and cell phones, among other things.

For Chalco, the acquisition "is aligned with the company's strategic direction of optimizing its global industrial layout and holds significant importance," it said.

CBA, Brazil's oldest established aluminum company, operates three bauxite mines that together produce around 2 million metric tons annually. It also has an aluminum operation in Sao Paulo that includes an alumina refinery, an aluminum smelter and other processing facilities.

Rio Tinto said the joint venture will tap into complementary expertise to "unlock the next phase of growth at CBA." Chinalco has an 11% stake in Rio Tinto.

The deal price of 10.50 reais a share in cash represents a 21% premium to CBA's 20-day weighted-average trading price, Rio Tinto said. Once the deal is completed, the joint venture will begin a mandatory tender offer for the remaining shares in CBA not held by Votorantim, it said.

For the Anglo-Australian company, the world's second-biggest miner by market value, the deal reflects a "strategy to deliver value for shareholders by extending our low-carbon, renewable-powered aluminum footprint in rapidly growing markets," said aluminum chief Jérôme Pécresse.

"It also provides the opportunity to grow our bauxite and alumina supply chain in the Atlantic region," he said.

Rio Tinto is meantime considering a possible combination with rival Glencore that could transform it into the world's largest miner with a market value of more than $200 billion.


Write to Rhiannon Hoyle at rhiannon.hoyle@wsj.com


(END) Dow Jones Newswires

01-29-26 2224ET