Alcoa Corporation has announced the sale of its 25.1% stake in the Ma’aden joint venture to the Saudi Arabian Mining Company (Ma’aden) for a total consideration of approximately $1.1 billion. The transaction, which includes about 86 million shares valued at $950 million and $150 million in cash, marks a significant shift in Alcoa’s investment portfolio.
The agreement, formalized through a binding share purchase and subscription agreement, was reached on September 15. This strategic move allows Alcoa to streamline its operations and reallocate resources to other core business areas. The sale enhances Ma’aden’s position in the global mining sector, furthering its growth and expansion objectives.
Roy Harvey, CEO of Alcoa, commented on the deal, stating, “This transaction aligns with our strategy to optimize our portfolio and strengthen our balance sheet. It also provides us with the financial flexibility to pursue strategic growth opportunities and deliver additional value to our shareholders.”
The Ma’aden joint venture, which includes Ma’aden Aluminum Company and Ma’aden Bauxite and Alumina Company, has been a critical asset in Alcoa’s portfolio, contributing significantly to its operational and financial performance over the years. However, this divestiture is expected to bring about positive outcomes for both companies involved.
The transaction is subject to customary regulatory approvals and is anticipated to close by the end of the year. Upon completion, Alcoa plans to utilize the proceeds to reduce debt and invest in growth projects that align with its long-term strategic goals.
