Arconic, the aluminum and titanium manufacturer, has confirmed that its planned split is on track for the second quarter of 2020, and will yield two new businesses: a) Arconic, comprised of the current organization’s Global Rolled Products portfolio; and b) Howmet Aerospace, consisting of the current Engineered Products and Solutions operations that produce investment-cast engine components and engineered structures, fastening systems, and forged aluminum wheels.
It has not yet been announced which of the two businesses would be the “spin-off”, with its own stock, and which will remain the holding of current shareholders.
The Howmet name is presently associated with Arconic’s aerospace investment casting and hot isostatic pressing operations headquartered in Whitehall, MI, a long established business that Alcoa acquired in 2000.
Arconic was formed in 2016 in a similar break-up of Alcoa Inc.: That group’s mining, refining, and primary aluminum production remained in one portfolio (the current Alcoa), and the rolled products, engineered products, transportation, and construction product lines formed the new business. Via its forging, ring rolling, casting, additive manufacturing, and other manufacturing capabilities, Arconic is a significant supplier of lightweight components for aerospace, automotive, commercial transportation, and defense markets.
Under pressure from shareholders to improve earnings, and having rejected a privatization proposal from Apollo Global Management, Arconic directors decided in February to split the business and to implement a cost-cutting initiative.
Arconic plans will reduce its operating costs by about $230 million as it prepares for the separation.