Alcan

Alcan was a Canadian mining, refining, smelting and aluminium-manufacturing company that grew into one of the world’s largest integrated aluminium producers. Its origins lay in the Northern Aluminum Company, founded in 1902 in Shawinigan, Quebec, as part of the Pittsburgh Reduction Company. Over the following decades, the business developed capabilities across the aluminium value chain, including bauxite and alumina activities, primary aluminium production, rolling, extrusion, fabrication and packaging materials. The company’s growth was closely tied to the expansion of Canadian hydroelectric power and the increasing use of aluminium in transportation, construction, electrical infrastructure, consumer goods and military production. It established important industrial operations in Quebec and Ontario and later developed an international production and distribution network. During the First and Second World Wars, demand for aluminium increased substantially. Its British operations also supplied components for military aircraft, including parts associated with Spitfire production during the Second World War. Alcan played a significant role in the development of Arvida, now part of Saguenay in Quebec, and later undertook a major expansion project at Alma, Quebec. The Kitimat project in British Columbia, launched in 1951, was another landmark investment in Canadian aluminium production and was described at the time as an unusually large public-private partnership. The company remained a dominant industry participant despite antitrust pressure in the United States and the emergence of competitors such as Kaiser Aluminium and Reynolds. From the 1990s onward, Alcan increasingly pursued international consolidation and downstream diversification. It acquired Algroup, also known as Alusuisse, in 2000 and became Alcan Inc. in 2001. The acquisition made Alcan the second-largest primary aluminium producer. Its purchase of the Pechiney Group in 2004 expanded its position in primary aluminium, fabricated products and packaging and made it the largest aluminium manufacturer by production at that time, according to the referenced historical account. In 2007, Rio Tinto acquired Alcan in a transaction valued at US$38 billion. The offer prevailed over a proposed US$27.5 billion bid from Alcoa. Following completion, Alcan’s independent listed-company identity ended, and its operations were reorganized within Rio Tinto. The company was amalgamated with Rio Tinto Canada Holding and renamed Rio Tinto Alcan in 2008. Rio Tinto subsequently divested or reorganized several former Alcan businesses, including packaging, composites and engineered products. Alcan therefore survives primarily as a historical corporate name and as part of the lineage of Rio Tinto’s aluminium operations rather than as an independent operating company.

Alcan’s history began in 1902, when the Northern Aluminum Company was established in Shawinigan, Quebec, as part of the Pittsburgh Reduction Company. The company initially developed in the context of Canada’s emerging hydroelectric-powered aluminium industry. In 1913 it opened a kitchen-utensil plant and foundry in Toronto and subsequently added rolling capability, marking an early move beyond primary metal production. During the First World War, aluminium output expanded sharply in response to military demand. In 1925 the company was renamed the Aluminum Company of Canada. It contributed to the industrial development of Arvida in Quebec by supporting major infrastructure, including port and railway facilities. The company also expanded internationally. In England, an aluminium pig and rolled-aluminium factory opened at Hardwick, near Banbury, in 1931. During the Second World War, that operation helped produce parts for military aircraft. The Second World War generated another major expansion. Between 1937 and 1944, the company’s production capacity, sales and income increased substantially, assisted by government financing arrangements and tax measures in several Allied countries. In 1945 the Aluminum Company of Canada was formally registered under the trade name Alcan. Although sales fell immediately after the war, postwar construction, electrification and industrial growth restored demand for aluminium. In 1951 Alcan began a large project at Kitimat, British Columbia, based on hydroelectric power and aluminium smelting. The project became an important symbol of Canadian industrial development. In the United States, a 1950 antitrust ruling required shareholders to divest holdings in either Aluminum Limited, the holding-company structure associated with Alcan, or Alcoa. Despite this legal pressure and increased competition from Kaiser Aluminium and Reynolds, Alcan remained a major producer for much of the postwar period. The company continued to develop fabricated products and international operations. It sold its building-products unit in 1994. Between 1998 and 2001 it carried out a major construction program at Alma in Quebec, creating annual production capacity of approximately 400,000 metric tonnes according to the referenced account. In 2000 Alcan acquired Algroup, or Alusuisse Group, and in 2001 the combined company adopted the name Alcan Inc. This transaction strengthened Alcan’s international reach and made it the second-largest primary aluminium producer. Alcan expanded again in 2004 through the acquisition of Pechiney, a major producer with primary aluminium, fabrication and packaging activities. The acquisition made Alcan the largest aluminium manufacturer by production according to the historical source. Its portfolio consequently extended from upstream materials and smelting into aerospace-related materials, engineered products, rolled products, packaging and other downstream applications. In 2007 Rio Tinto acquired Alcan for US$38 billion. The transaction followed an unsuccessful US$27.5 billion offer from Alcoa and created a major global aluminium producer within Rio Tinto. Alcan was amalgamated with Rio Tinto Canada Holding in 2008 and renamed Rio Tinto Alcan. Rio Tinto then began separating several downstream businesses from its core aluminium operations. Alcan Packaging was sold to Amcor, Alcan Composites to Schweiter Technologies and Alcan Food Packaging to Bemis in 2010. In 2011, investors associated with Apollo Global Management and Fonds stratégique de participations acquired majority and minority interests in Alcan Engineered Products, excluding Cable. The former Alcan group consequently became part of Rio Tinto’s aluminium history rather than continuing as an independent brand.

1. 2011Engineered Products ownership reorganized

   Apollo Global Management and Fonds stratégique de participations acquired interests in Alcan Engineered Products, excluding Cable.

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2. 2010Downstream businesses divested

   Alcan Packaging, Alcan Composites and Alcan Food Packaging were sold to Amcor, Schweiter Technologies and Bemis respectively.

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3. 2008Renamed Rio Tinto Alcan

   Alcan was amalgamated with Rio Tinto Canada Holding and renamed Rio Tinto Alcan.

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4. 2007Acquired by Rio Tinto

   Rio Tinto completed its US$38 billion acquisition of Alcan.

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5. 2004Pechiney acquired

   Alcan acquired Pechiney, strengthening its position in primary aluminium, fabrication and packaging.

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6. 2001Company renamed Alcan Inc.

   The combined business adopted the Alcan Inc. name after the Algroup transaction.

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7. 2000Algroup acquired

   Alcan acquired Algroup, also known as Alusuisse Group, expanding its international aluminium and downstream portfolio.

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8. 1994Building-products unit sold

   Alcan sold its building-products unit to Genstar Capital.

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9. 1951Kitimat project initiated

   Alcan launched a major aluminium development at Kitimat, British Columbia, supported by hydroelectric power.

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10. 1945Alcan trade name registered

    The Aluminum Company of Canada was formally registered under the trade name Alcan.

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11. 1931English rolling and aluminium plant opened

    An Alcan pig and rolled-aluminium factory opened at Hardwick near Banbury in England.

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12. 1925Renamed Aluminum Company of Canada

    The Canadian operating company adopted the name Aluminum Company of Canada.

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13. 1913Toronto fabrication operations opened

    The company opened a kitchen-utensil production plant and foundry in Toronto and later added a rolling mill.

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14. 1902Northern Aluminum Company established

    The Northern Aluminum Company was founded in Shawinigan, Quebec, as part of the Pittsburgh Reduction Company.

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Historically positioned as a vertically integrated, international aluminium producer spanning raw materials, refining, smelting and downstream fabrication.

• Bauxite and aluminaMining and refining

  Alcan’s upstream activities included access to bauxite resources and the refining of bauxite into alumina, the intermediate feedstock used in primary aluminium production. These operations supported the company’s integrated model and linked mining and refining with its smelting network.

• Primary aluminiumAluminium smelting

  Primary aluminium produced through the electrolytic reduction of alumina was the foundation of Alcan’s industrial business. Its smelters supplied metal for transportation, construction, electrical infrastructure, packaging and manufactured goods across the company’s international operations.

• Rolled aluminium productsAluminium fabrication

  Rolled aluminium products included sheet and related materials produced for industrial, transport, construction, packaging and specialist applications. Rolling capability was established early in the company’s development and remained an important downstream link between smelting and end-use markets.

• Extruded and fabricated aluminium productsAluminium fabrication

  Alcan produced extruded, engineered and other fabricated aluminium products for industrial and transportation customers. The business represented the company’s move toward higher-value downstream materials rather than relying solely on commodity primary metal.

• Aluminium packaging materialsPackaging materials

  The packaging portfolio included aluminium foil and related flexible or formed packaging materials. It became more significant as Alcan expanded through the Algroup and Pechiney transactions, although these activities were later separated from Rio Tinto’s core aluminium operations.

• Alcan CompositesComposite materials

  Alcan Composites supplied composite panel and related material solutions within the former group’s downstream portfolio. The business was sold to Schweiter Technologies in 2010 during Rio Tinto’s post-acquisition restructuring.

• 2011Sell interests in Alcan Engineered ProductsM&A

  Rio Tinto continued restructuring the downstream engineered-products activities inherited through Alcan.

  What changed. Apollo Global Management acquired a 51% interest and Fonds stratégique de participations acquired a 10% interest in Alcan Engineered Products, excluding Cable; Rio Tinto retained 39%.

  Aftermath. Ownership of the engineered-products business shifted to a partnership structure rather than remaining wholly within Rio Tinto.

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• 2010Divest selected downstream businessesStrategy

  Rio Tinto announced that it would reduce the non-core downstream portfolio inherited from Alcan.

  What changed. Alcan Packaging was sold to Amcor, Alcan Composites to Schweiter Technologies and Alcan Food Packaging to Bemis.

  Aftermath. The divestitures narrowed the former Alcan portfolio and refocused Rio Tinto’s aluminium activities.

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• 2008Integrate Alcan into Rio Tinto AlcanStrategy

  Following the acquisition, Rio Tinto needed to combine Alcan’s corporate structure and operations with its existing group.

  What changed. Alcan was amalgamated with Rio Tinto Canada Holding and renamed Rio Tinto Alcan.

  Aftermath. The Alcan corporate identity no longer represented an independent listed company, while the aluminium operations continued within Rio Tinto.

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• 2007Accept Rio Tinto acquisitionM&A

  Alcan was the subject of competing acquisition interest from Rio Tinto and Alcoa, with Rio Tinto offering the higher transaction value.

  What changed. Rio Tinto completed the acquisition of Alcan for US$38 billion.

  Aftermath. Alcan ceased to operate as an independent listed company, and its principal assets were integrated into Rio Tinto’s aluminium business.

  Acquisition value. US$38 billion (2007)

  • Alcoa — Alcoa had made a previously reported US$27.5 billion offer for Alcan, but that proposal did not prevail.
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• 2004Acquire PechineyM&A

  Alcan pursued additional scale in primary aluminium production, fabrication and packaging.

  What changed. Alcan acquired the Pechiney Group, a major international aluminium producer and fabricator.

  Aftermath. Alcan became the world’s largest aluminium manufacturer by production according to the referenced historical account, with a broader downstream portfolio.

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• 2000Acquire AlgroupM&A

  Alcan sought greater international scale and a broader mix of primary and downstream aluminium activities.

  What changed. Alcan acquired Algroup, also known as Alusuisse Group, and subsequently operated as Alcan Inc.

  Aftermath. The transaction made Alcan the second-largest primary aluminium producer and expanded its international fabrication and packaging operations.

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• 2011Rio Tinto sells minority interests in Alcan Engineered Products

  Rio Tinto sold 51% to Apollo Global Management and 10% to Fonds stratégique de participations in Alcan Engineered Products, excluding Cable, while retaining a 39% interest.

  M&A
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• 2010Rio Tinto announces disposal of Alcan Packaging

  Rio Tinto sold Alcan Packaging to Amcor as part of its post-acquisition restructuring of businesses inherited from Alcan.

  M&A
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• 2010Alcan Composites sold to Schweiter Technologies

  The former Alcan Composites business was sold to Schweiter Technologies during the restructuring of Rio Tinto’s former Alcan portfolio.

  M&A
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• 2010Alcan Food Packaging sold to Bemis

  Rio Tinto sold Alcan Food Packaging to Bemis as part of its program to dispose of selected downstream businesses.

  M&A
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• 2008Alcan becomes Rio Tinto Alcan

  Alcan was amalgamated with Rio Tinto Canada Holding and renamed Rio Tinto Alcan, integrating its principal aluminium operations into the Rio Tinto group.

  M&A
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• 2007Rio Tinto acquires Alcan for US$38 billion

  Rio Tinto completed its acquisition of Alcan after an acquisition contest involving Alcoa. The transaction made Rio Tinto a leading global aluminium producer and ended Alcan’s status as an independent listed company.

  M&A
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1. Alcan
2. Rio Tinto completes acquisition of Alcan