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Alcoa to buy titanium supplier RTI

Alcoa Inc. has agreed to acquire RTI International Metals Inc., a titanium supplier, for $1.3 billion. Alcoa is offering $41 per share, a 50% premium over RTI’s closing price on Friday, in an all-stock transaction. RTI’s stoke rose nearly 40%, while Alcoa’s shares fell 7.5% to a nine month low on stress that it might have overpaid for RTI. Alcoa, known as an aluminum producer, said 80% of RTI’s business is in aerospace and defense. The deal is its latest to diversify into value added products.

Alcoa Chief Executive Klaus Kleinfeld said, “This builds out our value-added business in a very attractive market-aearospace” he also said titanium is the fastest growing metal being used in aerospace production. Alcoa completed its purchase of Tital, a German manufacturer of titanium and aluminum structural castings for aircraft, last week. “Basically, we’ve become a titan in titanium,” Kleinfeld said.