Alcoa Inc. and joint-venture partner Alumina Ltd. have settled their dispute, ending competing litigation and removing a potential hurdle to Alcoa's plans to split into two new companies later this year.

New York-based Alcoa and the Melbourne, Australia-based Alumina have been in business together since the 1960s, with Alcoa owning 60% of Alcoa World Alumina and Chemicals, and Alumina holding the rest.

Alumina grew concerned over how Alcoa's plans to split would affect their joint venture. Alumina was worried, among other concerns, about potentially having to bear a hefty share of the splitting Alcoa's liabilities once the company went through its transformation.

The partners held a series of meetings that resulted in a lawsuit brought by Alcoa against its Australian partner. Alumina in June filed a counterclaim that aimed to block Alcoa's planned split without its consent.

Thursday, the companies announced that they had revised their joint-venture agreement to both their satisfaction and that they had in turn decided to "terminate their litigation," the companies said in a joint press release.

"We have refreshed the joint venture agreements to reflect the new realities of our industry and Alcoa and Alumina's individual circumstances," Alumina Chief Executive Peter Wasow said in the release. "These agreements strengthen the AWAC joint venture for Alcoa and Alumina, giving the companies greater control over their investments and future strategic options."

Alcoa has announced plans to change its name to Arconic and focus on engineering parts for aerospace and automotive businesses, and to split off a new company, Alcoa Corp., which will house the company's traditional mining, smelting and refining divisions.

The move is largely in response to declining aluminum prices and stiffer competition from lower-cost producers, led by China.

Alcoa previously said its legal clash with Alumina didn't put its plans to split in jeopardy. On Thursday, the company said those plans remain on track for completion in the second half of 2016.

Write to Ezequiel Minaya at ezequiel.minaya@wsj.com

(END) Dow Jones Newswires

September 01, 2016 20:35 ET (00:35 GMT)

Copyright (c) 2016 Dow Jones & Company, Inc.
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