Alcoa Set to Sell its 25.1% Share in Ma’aden Partnership for $1.1 Billion

On September 15, 2024, Alcoa announced that it has signed a binding share purchase and subscription agreement with the Saudi Arabian Mining Company (Ma’aden), under which it will sell its 25.1% stake in the Ma’aden joint venture for approximately $1.1 billion. The deal includes about 86 million shares of Ma’aden, valued at $950 million, based on Ma’aden's average share price over the past 30 days, along with $150 million in cash. Established in 2009, the joint venture consists of two key entities: the Ma’aden Bauxite and Alumina Company (MBAC), which operates the bauxite mine and alumina refinery, and the Ma’aden Aluminium Company (MAC), which runs the aluminum smelter and casthouse. Alcoa currently holds 25.1% of the joint venture, while Ma’aden controls the remaining 74.9%. As of June 30, 2024, Alcoa valued its investment in the joint venture at $545 million.

Under the terms of the agreement, Alcoa will retain its Ma’aden shares for at least three years. One-third of the shares will become transferable on the third, fourth, and fifth anniversaries of the transaction’s closure. During this holding period, Alcoa can hedge or borrow against its Ma’aden shares, with certain provisions allowing for the holding period to be shortened. Following the deal, Alcoa is expected to hold around 2% of Ma’aden’s total outstanding shares.

William F. Oplinger, Alcoa’s President and CEO, expressed confidence in the transition, stating, “We deeply value our partnership with Ma’aden. This new arrangement strengthens MBAC and MAC while simplifying our portfolio, increasing transparency in our Saudi Arabian investments, and providing financial flexibility to boost Alcoa’s long-term competitiveness.”

Bob Wilt, Ma’aden’s CEO, highlighted the benefits of the partnership, saying, “Since 2009, Alcoa has been a crucial partner. We look forward to future collaborations as we continue to elevate Saudi Arabia's mining sector as a key pillar of the national economy.”

The transaction is pending regulatory approvals, Ma’aden shareholder consent, and other customary conditions. It is anticipated to close in the first half of 2025. Citi is serving as Alcoa’s exclusive financial advisor, while White & Case LLP is providing legal counsel for the transaction.

Alcoa is a global leader in bauxite, alumina, and aluminum products, committed to transforming the aluminum industry for a sustainable future. Guided by core values of integrity, operational excellence, care for people, and bold leadership, Alcoa’s mission is to turn raw potential into real progress. Since pioneering the process that made aluminum accessible and essential to modern life, Alcoa’s skilled employees have consistently delivered breakthrough innovations and best practices, driving improvements in efficiency, safety, sustainability, and fostering stronger communities wherever the company operates.