Alcoa's Bid for Alcan (B) Case Solution And Analysis, HBR Case Study Solution & Analysis of Harvard Case Studies

In light of augmented competition from rising markets, Alcoa CEO Alain Belda was worried concerning the company's market standing in spring 2007. China's current entry into the aluminum market was disturbing both demand and supply. Moreover, downstream and upstream merchandise was coming on-line from diverse parts of the world, together with Russia. As a consequence, Alcoa had lost its historical marketplace authority and stock premium.

Belda was convinced that for Alcoa to make progress in its leadership position, the business would have to augment efficiencies by intensifying diversification of its scale and reach. The acquisition of a sizable adversary offered the very best opportunity to achieve this goal and, as a consequence, he was particularly intrigued by Canadian competition, Alcan, because its assets advance its reach and would complement the portfolio of Alcoa. Further, Alcan had sold off non-aluminum property, principally making it a pure play in aluminum. That and its admission to relatively affordable Canadian hydro power made it an even more intriguing acquisition chance for Alcoa. Yet, Rio Tinto, another major rival, was also curious in Alcan; the firm was in play.

PUBLICATION DATE: October 23, 2013 PRODUCT #: 114030-HCB-ENG

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