Alcoa announced today it has agreed to sell its 25.1 per cent stake in the Ma’aden Joint Venture to Saudi Arabian Mining Company (Ma’aden) for approximately $1.1 billion.
This deal, formalised through a binding share purchase and subscription agreement, involves Ma’aden purchasing Alcoa’s entire interest in the joint venture for a combination of 86 million shares and $150 million in cash.
According to the ASX-listed company, the transaction includes around 86 million shares of Ma’aden, valued at $950 million based on the volume-weighted average share price over the past 30 days as of 12 September 2024, alongside $150 million in cash.
The joint venture, established in 2009, operates a fully integrated mining complex in Saudi Arabia, consisting of two entities: the Ma’aden Bauxite and Alumina Company (MBAC) and the Ma’aden Aluminium Company (MAC).
William F. Oplinger, Alcoa’s President and CEO, commented, “We deeply value our partnership with Ma’aden. We are confident that under the new arrangement, MBAC and MAC are well-positioned for success.”
Oplinger further noted that “the transaction simplifies our portfolio, enhances visibility in the value of our investment in Saudi Arabia and provides greater financial flexibility for Alcoa, an important part of improving our long-term competitiveness.”
The carrying value of Alcoa’s stake in the joint venture was recorded at $545 million as of 30 June 2024. Post-transaction, Alcoa will hold approximately 2 per cent of Ma’aden’s outstanding shares.
Under the agreement, Alcoa will retain its Ma’aden shares for a minimum of three years, with one-third of the shares becoming transferable after each of the third, fourth, and fifth anniversaries of the transaction’s closing.
Bob Wilt, Ma’aden’s CEO, expressed enthusiasm for the future, stating, “Since 2009, Alcoa has been a valued partner of Ma’aden, and our aluminium business has benefited substantially from our strategic partnership. We look forward to future opportunities to collaborate as we continue to build the mining sector into the third pillar of the Saudi economy.”
The transaction is contingent on regulatory approvals, Ma’aden’s shareholder approval, and other standard closing conditions.
It is anticipated to be finalised in the first half of 2025. Citi is serving as Alcoa’s exclusive financial advisor, while White & Case LLP is acting as its legal counsel.
