Pittsburgh-based Alcoa, a bauxite, alumina, and aluminum products provider, recently entered into an agreement to sell 25.1 percent of its full ownership interest in the Ma’aden Joint Venture to Saudi Arabian Mining Company (Ma’aden) for approximately $1.1 billion.
The transaction includes $150 million in cash and approximately 86 million shares of Ma’aden valued at $950 million as of Sept. 12. Ma’aden already owns a 74.9 percent stake.
The Ma’aden Joint Venture is comprised of the Ma’aden Bauxite and Alumina Co. (MBAC), the bauxite mine and alumina refinery, and the Ma’aden Aluminium Co. (MAC), the aluminum smelter and casthouse. It was launched in 2009 as a fully integrated mining complex in Saudi Arabia.
“We deeply value our partnership with Ma’aden,” William F. Oplinger, Alcoa president and CEO, said. “We are confident that under the new arrangement, MBAC and MAC are well-positioned for success. 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 transaction is subject to regulatory approvals, Ma’aden’s shareholder approval and customary closing conditions. It is expected to close in the first half of next year.