Alba and Maaden plan global aluminium powerhouse

Aluminium Bahrain (Alba), one of the world’s largest aluminium smelters, and Saudi Arabian Mining Company (Maaden) have signed a non-binding agreement to explore forming a “global powerhouse” in aluminium production.

“This potential combination will reshape the global aluminium industry, positioning the merged entity as one of the largest aluminium producers worldwide,” Bahrain-listed Alba said in a statement.

The combination of Maaden’s aluminium operations and Alba will bring together more than 75 years of industry expertise with the financial strength and production capacity needed to compete on a global scale, the mining company added in a statement to the Saudi stock exchange (Tadawul).

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As part of the heads of terms, Maaden will purchase new shares in Alba in exchange for the entire share capital of two of its subsidiaries – Maaden Aluminium Co and Maaden Bauxite and Alumina Co – formed through a joint venture with US aluminium producer Alcoa.

Maaden agreed to purchase a 25.1 percent stake from US aluminium producer Alcoa in their joint venture for $1.1 billion on Sunday. The transaction includes 86 million shares of Maaden, valued at ​$950 million, and $150 million in cash.

During the due diligence period, both companies will exchange information and evaluate the strategic and financial benefits of a business combination.

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The proposed transaction is subject to financial, tax, legal, technical and commercial due diligence as well as fulfillment of other terms and agreements.

Alba chairman Khalid Al Rumaihi said the potential partnership will allow both companies to scale up production, extend their global presence, and explore new opportunities for clean energy.

“This partnership will elevate our competitive edge on a global scale,” said Maaden CEO Bob Wilt.

No financial details were shared, but the non-binding agreement included the possible listing of Alba on Tadawul.