Alcoa Buys Specialty Metals Company RTI International Jeff Swensen/Getty Images

Alcoa Buys Specialty Metals Company RTI International

Alcoa is betting on an increasing need for titanium in the growing aerospace industry. Analysts expect spending for the strong yet light metal to grow 5% annually over the next five years.

Alcoa (IW 500/53), the lightweight metals manufacturer, says it has signed a deal to buy RTI International Metals in a $1.5 billion in a stock-for-stock deal.

RTI specializes as a global supplier of titanium and other special metals for the aerospace, defense, energy and medical device markets.

“Alcoa is accelerating its value-add growth engine by acquiring titanium leader RTI,” said Klaus Kleinfeld, Alcoa Chairman and Chief Executive Officer. “We are combining two innovators in materials science and process technology, shifting Alcoa’s transformation into a higher gear. RTI expands our aerospace portfolio market reach and positions us to capture future growth to deliver compelling value for customers, shareholders and employees.”

Alcoa is betting on an increasing need for titanium in the growing aerospace industry. Analysts expect spending for the strong yet light metal to grow 5% annually over the next five years. It's a key component in next generation aircraft components, and processing the metal complements many of the company's current forging and casting capabilities.

The acquisition puts Alcoa on the cutting edge for producing some of the largest and most complex aerospace components, along with medical devices, oil and gas products and even 3-D printing.

“Innovation and scale are critical to winning in both the titanium and aerospace industries today, which is why this transaction is such a natural strategic fit for both RTI and Alcoa,” said Dawne Hickton, Vice Chair, President and Chief Executive Officer of RTI International Metals.

Last week, Alcoa said it was considering more cutbacks in its smelting and refining operations because of weak worldwide prices. Aluminum prices are down about 30% since 2011 tied to the slowing economy in China, Alcoa's top customer.

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