Local mining giant “Ma’aden” (1211) signed an agreement to acquire the entire 20.6% stake of “SABIC Industrial Investments Co. in “Aluminum Bahrain (Alba)”.
This concludes a busy week for the company, which saw it ink several agreements, including with American industry titan Alcoa.
This aligns with the Kingdom’s efforts to make mining the “third pillar” of its economy.
Details
Ma’aden signed a stock purchase agreement with SABIC Industrial Investments, wholly owned by Saudi Basic Industries Corporation (2010), to acquire 292.8 million shares of Alba’s capital stock for between 3.62 billion SAR and 3.97 billion SAR.
So what
This acquisition, subject to regulatory approvals, is part of Ma’aden’s efforts to expand its operations and enhance its regional growth.
The company stated that the deal reflects its continuous development and ambition to multiply its size tenfold by 2040, focusing on aluminum as one of the core pillars of its strategy.
It is worth noting that Ma’aden and Alba recently signed a non-binding term sheet to explore the possibility of merging their aluminum operations to form a global powerhouse in the aluminum industry in the region.
Some context
Shares of Ma’aden and Alba surged during trading on Tuesday following the announcement of their partnership.
The market cap of the Bahraini company surpassed USD 4 billion, rising by 15% just an hour after the Bahrain stock exchange opened.
Ma’aden shares in the Saudi market increased by over 5% during the same period, bringing its market value to around USD 41 billion.
Now what
SABIC reported that the sale aligns with its priorities to develop its product portfolio and focus on its core businesses as it looks to enhance returns and reallocate capital to higher-margin opportunities.
This aligns with its target to become a “global leader” in the chemicals sector. It added that it expects the impact of the deal to be positive in the long run.
