Alumina (ASX:AWC), an Australian company, has conceded to a $2.2 billion all-stock buyout offer from the American aluminium manufacturer, Alcoa.

This agreement is consistent with the proposal Alcoa put forth on February 26, where Alcoa’s CEO William Oplinger predicted that the deal would cut Alumina’s overhead costs by A$12 million ($7.93 million) annually.

As per the conditions of the transaction, Alumina shareholders are to receive 0.02854 Alcoa shares for every Alumina share they hold, resulting in a value of A$1.15 per Alumina share, which is based on Alcoa’s closing price as of February 23.

After the deal finalizes, Alumina shareholders on the record date will possess nearly 31.6% of the merged entity, whereas existing Alcoa shareholders will account for 68.4%.

In absence of a better proposal, Alumina’s leadership, including its Managing Director and CEO, recommends that shareholders approve the deal.

Alumina’s sole asset is a 40% share in the Alcoa World Alumina and Chemicals joint venture, which is supervised by Alcoa and has investments in bauxite mining, alumina refining, and aluminium smelting across Australia, Brazil, Spain, Saudi Arabia, and Guinea.

Alumina (ASX:AWC) is an Australian company principally known for its 40% stake in the Alcoa World Alumina and Chemicals joint venture, with interests spanning bauxite mining, alumina refining, and aluminium smelting in several countries.