* Alumina, bauxite joint venture poison pill removed
* Alcoa spin-off expected to go ahead by end 2016 (Adds Alumina comment)
MELBOURNE, Sept 2 (Reuters) - Alcoa Inc (NYSE:AA) AA.N and Alumina Ltd AWC.AX have settled a dispute and agreed to reshape their joint venture, removing an obstacle to Alcoa's plan to split into two companies and making its Australian partner a more attractive takeover target.
The two companies agreed to terminate a court fight that had threatened to delay Alcoa's plan to spin off its plane and car parts business, which is now set to go ahead by the end of this year.
Alumina raised concerns last May that the spin-off plan would leave their Alumina and World Chemicals (AWAC) joint venture weakened. Alcoa fought back by going to court to seek a declaration that Alumina had no right to block the demerger. agreement on Friday removes a poison pill in the AWAC joint venture, which is 60 percent owned by Alcoa and 40 percent owned by Alumina, which had long made it nearly impossible for anyone other than Alcoa to make a bid for Alumina.
"These agreements strengthen the AWAC joint venture for Alcoa and Alumina, giving the companies greater control over their investments and future strategic options," Alumina Chief Executive Peter Wasow said in a statement.
Previously, any bidder for Alumina would have had to offer Alcoa right of first refusal to acquire 60 percent of the bidder's bauxite and alumina assets.
The changes simplify dividend and cash management policies and will require AWAC to raise a small amount of debt to help fund growth projects, the two companies said.
It also clarifies what may happen to alumina and bauxite supply rights if ownership of Alumina were to change hands.
"Among other benefits, this opens the door for an industrial partner to enter the joint venture, and like Alcoa, to become a long-term customer for bauxite and alumina," Alcoa's president of global primary products, Roy Harvey, said in a statement.