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Maaden to buy Alcoa stake in Saudi venture for $1.1bn

By Pramod Kumar
The Maaden-Alcoa joint venture, established in 2009, is a fully integrated mining complex in Saudi Arabia Unsplash/Artyom Korshunov
The Maaden-Alcoa joint venture, established in 2009, is a fully integrated mining complex in Saudi Arabia

Saudi Arabian Mining Company (Maaden) will purchase a 25.1 percent stake from US aluminium producer Alcoa in their joint venture for $1.1 billion.

The transaction includes 86 million shares of Maaden, valued at ​$950 million, and $150 million in cash.

The joint venture, established in 2009, is a fully integrated mining complex in Saudi Arabia consisting of two entities: Maaden Bauxite and Alumina Company, which operates a bauxite mine and alumina refinery, and Maaden Aluminium Company, which runs an aluminum smelter and casthouse.

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As of June 30, 2024, Alcoa’s investment in the joint venture was valued at $545 million.

Under the terms of the agreement, Alcoa will be required to hold its Maaden shares for a minimum of three years. After this period, one-third of the shares will become transferable each year in the third, fourth, and fifth years of the transaction closing.

During the holding period, Alcoa will be permitted to hedge and borrow against its Maaden shares, and the holding period could be reduced in certain cases. Upon completion, Alcoa will own 2 percent of Maaden’s outstanding shares.

“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,” said Alcoa president and CEO William Oplinger.

The transaction is subject to regulatory approvals and is expected to close in the first half of 2025.

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