Apollo Weighs Scooping Aerospace-Parts Maker Arconic Again

  • Apollo Global Management, Inc APO discussed snapping aerospace parts maker Arconic Corp ARNC.
  • The financial terms of the possible deal remained undisclosed.
  • Arconic's advisers at Goldman Sachs Group Inc GS and Evercore Inc EVR have also reached out to other potential acquirers, the Wall Street Journal reports citing familiar sources.
  • Arconic carries a hefty debt load of over $1.5 billion. Should there be a deal, it will likely carry a significant premium, the WSJ writes.
  • Arconic, after separation in 2016 from the aluminum business now called Alcoa Corp AA, the company faced a campaign from activist investor Elliott Investment Management LP, which resulted in the resignation of Arconic's then-CEO Klaus Kleinfeld and an overhaul of its board. Timothy Myers became the CEO in 2020. 
  • In 2018 Apollo reportedly expressed interest in a deal for Arconic. Apollo ultimately came close to an agreement to pay upward of $10 billion for the company. Arconic instead further divided into two independent, publicly traded businesses in 2020. 
  • Arconic's Engineered Products and Forgings businesses remained in the existing company, which was renamed Howmet Aerospace Inc HWM. Its Global Rolled Products group became part of a new company that is now known as Arconic.
  • Arconic recently reported that its revenue for the fourth quarter totaled $1.9 billion, down 9% from the prior year, as higher interest rates fanned anxiety about the economy. 
  • Arconic's net loss widened to $273 million, or $2.70 per share, from $38 million, or $0.36, a year earlier
  • Price Action: ARNC shares closed higher by 19.5% at $26.44 on Tuesday.
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