*

Alumina shares highest in 7 months

*

Alumina board recommend deal to shareholders

*

Alumina stock one of the top gainers on AXJO

(Rewrites throughout, updates with further details, shares and

analyst reaction)

By Roushni Nair and Rishav Chatterjee

March 12 (Reuters) - Alcoa ( AA ) will buy Alumina

in an all-stock deal that values the Australian firm at

$2.2 billion, and makes the U.S. company one of the world's

largest producers of alumina and bauxite.

Shares of Alumina rose as much as 10.4% after Alcoa ( AA )

announced the deal on Monday, hitting their highest since August

2023. Alcoa ( AA ) shares gained 2.1% to $30.5 apiece.

Alcoa's ( AA ) push for acquiring its joint venture partner can be

seen as a gamble for metals which will be an important part of

the transition to cleaner sources of energy.

Buying Alumina gives Alcoa ( AA ) full control of their joint

venture, which is one of the world's largest producers of the

semi-processed form of aluminium. Aluminium is used to produce

renewable infrastructure and electric vehicles.

The global mining sector has seen a recent slew of merger

and acquisitions despite rising concerns around the economic

outlook of one of the world's largest metals buyer, China, and

slowing EV sales in the United States.

"It could be a win-win for both companies," Tim Waterer,

chief market analyst at trading firm KCM Trade, said.

"The takeover offer could be viewed as a vote of confidence

in the resources space despite a cloudy growth outlook for the

sector."

The buyout follows United States Steel's ( X ) $14.9 billion

deal to buy Japan's Nippon Steel ( NISTF ) and Newmont's ( NEM )

$15 billion acquisition of Aussie gold miner Newcrest.

Post the deal, Alumina shareholders will own about 31.6% of

the merged entity, while Alcoa ( AA ) shareholders will hold 68.4%.

Alumina's board, including Managing Director and CEO,

recommended shareholders vote for the deal, in the absence of a

superior proposal.

The deal comes months after Alcoa ( AA ) faced operational and

permit-realted problems for its bauxite business in Australia.

It also disclosed in January plans to halt production at the

Kwinana alumina plant in Western Australia in a move to control

costs.

($1 = 1.5126 Australian dollars)

(Reporting by Roushni Nair and Rishav Chatterjee in Bengaluru;

Editing by Krishna Chandra Eluri and Mrigank Dhaniwala)