Alcoa has decided to separate the company into two independent, publicly traded companies. For now, the company is referring to the companies simply as the upstream and value-added companies. The upstream company would consist of the five business units that make up Alcoa’s Global Primary Products Division (Bauxite, Alumina, Aluminum, Casting and Energy). The value-added company will include Global Rolled Products, Engineered Products and Solutions, and Transportation and Construction Solutions. The transaction is expected to be completed in the second half of 2016.

After the separation, the upstream company will operate under the Alcoa brand. A new name for the value-added company will be announced prior to closing.

“After steering the company through the deep downturn of 2008, we immediately went to work reshaping the portfolio,” said Klaus Kleinfeld, chairman and CEO, Alcoa. “We have repositioned the upstream business; we have an enviable bauxite position and are unrivaled in alumina, we have optimized aluminum, flexed our energy assets, and turned our casthouses into a commercial success story.”

Upon completion of the transaction, Klaus Kleinfeld will lead the value-added company as chairman and CEO. He will also serve as chairman of the upstream company during the transition phase. Each company will have its own independent board of directors that will include members of the current Alcoa Board. Full management teams and boards for both companies will be named in the months leading up to the launch of the two companies in the second half of 2016.

Alcoa believes the upstream company will be a cost-competitive industry leader in bauxite mining, alumina refining and aluminum production, positioned for success throughout the market cycle. The company’s footprint will include 64 facilities worldwide, and approximately 17,000 employees.

Alcoa has the world’s largest bauxite mining portfolio, with 46 million bone dry metric tons (dmt) of production in 2014. It has a low 19th percentile position on the global bauxite cost curve. Alcoa has been building its third-party bauxite business and is well-positioned to meet growing global demand.

The company’s alumina refining system will be the world’s largest, with operations positioned to serve major adjacent growth markets in Asia, the Middle East and Latin America. According to Alcoa, it has a 25th percentile, first quartile position on the global alumina cost curve, with a target to reach the 21st percentile by 2016.

The company will be the world’s fourth largest aluminum producer with a highly competitive second quartile cost curve portfolio. It will have an unrivalled casthouse network in close proximity to customers, and energy assets with power production capacity of approximately 1,550 MW with operational flexibility to profit from market cyclicality.