This is getting somewhat complicated. For those of you following it: the street thought that AA was a takeover target. Instead it is now bidding for Alcan. Of course it would have been better if some PE whale had bid for AA at a 25% premium. But the current situation is actually quite good. As part of the deal, AA will divest most of its non-metal production operations. That means it will be solely focused on being the largest and lowest cost aluminum producer. This is what shareholders want. If I'm right about the long-run aluminum situation, AA could turn out to be a very profitable company.
In the short run there may be a pullback as the market reacts to the confusion. If so I will buy some more.
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