South32 Ltd's stock plummeted 5.14% during intraday trading on Thursday, as investors reacted to the company's major divestment announcement.
The diversified miner has agreed to sell most of its aluminium assets to U.S.-based Alcoa for an implied enterprise value of up to $5.6 billion. The deal includes bauxite, alumina, and aluminum assets, with Alcoa also assuming approximately $1.2 billion in cleanup and site-closure liabilities tied to the operations.
Market sentiment appears to have turned negative regarding the transaction, with some analysts noting the deal could represent a strategic shift for South32 as it streamlines its business under a new CEO. The sell-off in South32 shares coincides with a significant drop in Alcoa's stock price following the deal announcement.