Rio Tinto Plans to Name Other Aluminum Executives

Rio Tinto Group plans to appoint aluminum-unit executives next month ahead of the completion of the $38.1 billion acquisition of Alcan Inc., creating the world's biggest producer of the lightweight metal. Those people will report to Dick Evans, the Alcan chief executive officer who will head the aluminum business, Rio said today in a U.S. Securities and Exchange Commission filing. The Alcan purchase should close in October, London-based Rio said. Rio, the world's third-largest mining company, will overtake Russia's United Co. Rusal as the biggest aluminum producer. Rio, led by CEO Tom Albanese, agreed in July to buy Montreal-based Alcan for $101 a share in cash. That topped a hostile bid by Alcoa Inc. by 33 percent. Rio Tinto is acquiring 3.5 million metric tons of aluminum capacity and low-cost power rights in Canada. "Considerable confidential discussions" are being held among Alcan's managers on positions, Evans said in a July 31 interview. Financial compensation from the change of control of Alcan gives some executives "a certain optionality" to leave, he said. Shares of Rio fell 28 pence to 3,307 pence in London. They have gained 19 percent in the past year. Alcan dropped 97 cents to C$100.93 ($95.60) on the Toronto Stock Exchange. The first formal meeting on combining the aluminum teams was on July 27 in London, Rio said. Financial Chief Evans and two Alcan non-executive directors will join Rio's board as part of the takeover agreement. Rio has said it probably will choose a chief financial officer for the new aluminum business from its own personnel. Rio Tinto plans to sell some businesses to help pay for the transaction, including Alcan's packaging unit. Alcan considered selling the unit before Rio made its offer and has received interest from both private-equity firms and other buyers, Evans said in the July interview. Albanese said on July 19 that other companies may be preparing offers for Alcan. Rio would get a $1.05 billion breakup fee should another company acquire Alcan.