KEY POINTS
- Alcoa to sell its 25.1 percent stake in Ma’aden joint venture for $1.1 billion.
- The deal includes 86 million Ma’aden shares and $150 million in cash.
- The transaction is expected to close in the first half of 2025.
Alcoa, the US-based aluminum producer, has announced plans to sell its 25.1 percent stake in the Ma’aden joint venture to Saudi Arabian mining company Ma’aden for $1.1 billion. The transaction, which includes 86 million shares of Ma’aden and $150 million in cash, is expected to be completed in the first half of 2025.
Alcoa CEO William Oplinger stated that the deal would simplify Alcoa’s portfolio, enhance the visibility of its investment in Saudi Arabia, and provide greater financial flexibility. Following the transaction, Alcoa will retain around 2 percent of Ma’aden’s outstanding shares, which it will hold for a minimum of three years.
A strategic move for Alcoa
The joint venture between Alcoa and Ma’aden was established in 2009 to create an integrated mining complex in Saudi Arabia. With Ma’aden already holding 74.9 percent of the project, this new deal gives the Saudi company complete control of the venture. The sale is part of Alcoa’s broader strategy to streamline its operations and focus on core business areas.
In his remarks, Oplinger expressed optimism about the sale’s impact on Alcoa’s financial structure and operational focus. He said, “The transaction simplifies our portfolio, enhances visibility in the value of our investment in Saudi Arabia, and provides greater financial flexibility for Alcoa.”
Bob Wilt, CEO of Ma’aden, commented on the future of the partnership, stating, “We look forward to future opportunities to collaborate as we continue to build the mining sector into the third pillar of the Saudi economy.”
Alcoa’s financial performance and outlook
The announcement follows Alcoa’s strong financial performance earlier this year. In July 2024, the company reported quarterly revenue of $2.9 billion, surpassing analysts’ expectations of $2.8 billion. The sale of its stake in the Ma’aden joint venture is expected to further bolster the company’s financial health by providing additional capital and liquidity.
The transaction is seen as a significant milestone for both companies. According to Mining.com, Ma’aden will gain full ownership of the venture, further solidifying its presence in the global aluminum industry. At the same time, Alcoa will continue to focus on its core operations while benefiting from its remaining shares in Ma’aden.
Impact on Saudi mining sector
For Saudi Arabia, this deal marks another step in the expansion of its mining sector, a key component of the country’s Vision 2030 initiative aimed at diversifying the economy. Also, the joint venture plays a crucial role in this strategy by boosting aluminum production and fostering economic growth.
Furthermore, Ma’aden’s acquisition of Alcoa’s shares is expected to strengthen its standing as one of the world’s leading mining companies. The company has been aggressively expanding its operations in recent years, and this move is expected to further its influence within the industry.
