Saudi Arabian Mining Company “Ma’aden” (1211) has signed a purchase and subscription agreement to acquire all of US-headquartered Alcoa’s shares in their joint venture.
The acquisition is valued at about USD 1.1 billion (SAR 4.1 billion).
Strong Expansion
Under the agreement, subject to regulatory approvals, Alcoa’s shares in both “Ma’aden Aluminium Co and “Ma’aden Bauxite and Alumina Co.” will be transferred to Ma’aden.
Global aluminum production giant Alcoa will receive USD 150 million in cash for a portion of its shares.
Additionally, Ma’aden will issue shares representing about 2.2% of its capital to Alcoa after the deal is completed, expected in the first half of 2025.
So what
Ma’aden notes that this acquisition will enhance the efficiency of its aluminum business.
The company’s CEO, Robert Wilt, said the deal aligns with Saudi Arabia’s efforts to develop its mining sector as the third pillar of its national economy.
Meanwhile, Saad al-Thaqfan, a board member of the Saudi Economic Association, told “Al Arabiya Business” that the acquisition will help increase Ma’aden’s revenue.
It will also bolster the company’s sales and strengthen its ability to expand.
Some context
In 2009, Ma’aden and Alcoa launched a joint venture to create an integrated mining complex in Saudi Arabia, which included developing a bauxite mine, a refinery, and an aluminum smelter.
Alcoa held a 25.1% stake in the project, while Ma’aden controlled 74.9%.
As of June 30, 2024, Alcoa’s investment in the project amounted to USD 545 million.
This effort is part of Saudi Arabia’s strategy to diversify its economy away from oil production and capitalize on the country’s other natural resources.
Now what
Ma’aden, the largest diversified mining company in the Middle East, and Aluminum Bahrain (Alba), one of the largest aluminum smelters in the world, announced the signing of non-binding heads of terms for the “potential merger” of Ma’aden’s aluminum business with Alba.
The goal is to establish a “leading global power” in aluminum production, according to a statement by Ma’aden.
The two companies also agreed to explore the possibility of a dual listing of Alba’s shares on the Saudi stock exchange (Tadawul).
