On July 1, Alcoa declined 5.01% overnight, trading at $49.53/share, with turnover of $623,000. The drop reflects investor concern over the company's announcement of a large-scale acquisition of South32's aluminum assets.

Alcoa agreed to acquire South32's bauxite, alumina, and aluminum smelting assets at an implied enterprise value of up to $5.6 billion. The deal structure includes $3.1 billion in cash, approximately $1 billion in Alcoa stock, and the assumption of $750 million in net debt and lease liabilities. The company has secured fully committed financing, with the initial tranche structured as a $3.1 billion bridge loan commitment. Post-transaction, South32 shareholders will hold approximately 6% of Alcoa. The stock had already fallen nearly 5% on the Sydney exchange ahead of the overnight session, reflecting concerns over premium pricing.

UBS recently lowered its price target on Alcoa to $68 from $80 while maintaining a Buy rating. The company expects the deal to be immediately accretive to EPS and free cash flow upon closing. Alcoa's next earnings report is scheduled for July 16.

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