Arconic sold to private equity firm
MASSENA, New York (WWNY) - Arconic, a spinoff of Alcoa that still has a facility in Massena, has been sold.
According to a news release, the company has entered into a definitive agreement to be acquired by a private equity firm called Apollo Global Management, Inc.
The sale is valued at $5.2 billion.
In the news release, the new owners say they will invest in:
- Upgrades to key machine centers to maximize the full potential of the company’s unique production capabilities
- Technology upgrades to bring the company’s plants and process controls to state-of-the-art standards
- Investments in projects that will provide for a cleaner environment in the communities in which the company operates
We talked with SUNY Potsdam business professor Dr. Greg Gardner. He says Arconic has been losing money for a while and that private equity firms usually try to make their acquisitions profitable again before flipping them.
“They don’t mention closing any facilities. Honestly, they might not say that at this point. They’ll wait until they get a closer look at what they just bought and they may then decide to close some facilities, combine workloads. They’re going to look for anything they can to make it profitable. Nobody spends $5.2 billion without a good idea of how you’re going to get it back,” said Gardner.
When asked whether Massena Arconic workers should view the sale as a positive or negative development, Gardner said, “I would say both. I would say uh-oh, this could be bad; they could decide to close us. But if they don’t close us, they’re almost certainly going to invest in us.”
It’s not clear how the sale will affect Massena’s Arconic plant, where 125 workers were employed as of June 2022, when the United Steelworkers Union announced a four-year deal with the company.
Gardner says the sale includes labor contracts, which the new owners will have to honor.
Arconic and Alcoa separated in 2016. Alcoa focuses on making aluminum. Arconic makes precision-engineered products out of aluminum.
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