Alcoa to Split into Two Companies

Alcoa Inc. is splitting into two independent, publicly traded companies. One will be an upstream business that focuses on aluminum mining and smelting. The second will be a value-add company that makes engineered products and aluminum sheet for the transportation and construction markets.

The split will separate Alcoa's highly cyclical commodity business, which has dragged down the company's stock more than 40% this year, from the company's high-tech, high-profit products, such as sheet aluminum increasingly used by carmakers. Klaus Kleinfeld, Alcoa's current chairman and CEO, will head the latter company.

The upstream unit, which will retain the Alcoa name, will operate 64 facilities, employ about 17,000 people and generate annual revenue of more than $13 billion, according to Alcoa. The value-add company, whose name will be announced next year, will employ 43,000 people at 157 locations, producing nearly $15 billion in annual revenue.

Alcoa expects to complete the separation in the second half of 2016.