No buyers stepped forward to snatch up Arconic Inc. amidst liability concerns about a cladding component manufactured by the U.S. company and used on the London high-rise where a massive fire killed more than 70 people in 2017.
Pittsburgh-based Arconic, formerly Alcoa, produced the composite panels of polyethylene-filled aluminum for a fabricator supplying cladding for the renovation of the 24-story tower. The panels were installed with combustible polyisocyanurate (PIR) insulation.
The external cladding and insulation were blamed for the fast-spreading flames that tore through the building after a refrigerator malfunctioned in an apartment.
Arconic has not been accused of any wrongdoing for its connection to the fire, but the investigation is ongoing and it put a snag in potential deals.
Arconic had been in talks with U.S. private equity firms about a $10 billion-plus takeover of the company, which also manufactures parts for the aerospace and automotive markets, as part of a strategy and portfolio review, according to Chairman John Plant.
"However, we did not receive a proposal for a full-company transaction that we believe would be in the best interests of Arconic's shareholders and other stakeholders," Plant said in a Jan. 22 statement.
Apollo Global Management reportedly was the front runner, but talks fell through with the firm and all potential buyers. A major issue involved protecting any buyer from liabilities related to Grenfell.
Arconic's board now has decided against pursuing a sale of the company.
"We will continue with the previously announced sale process for our building and construction systems business," Plant said. "More broadly, we remain strongly focused on creating value for Arconic shareholders, through continued operational improvements and through other potential initiatives, which we have identified in our strategic review."
Arconic stopped selling the product used on the Grenfell Tower — called Reynobond PE — for high-rise applications two weeks after the deadly inferno. However, fire tests going back to 2014 indicate the manufacturer knew the panels failed to meet the safety standards it claimed, the BBC has reported, citing internal Arconic reports and correspondence.