Saudi Arabia’s Maaden to buy stakes in US company Alcoa
Alcoa must retain its Maaden shares for at least three years
Dubai: Saudi Arabian Mining Company (Maaden) acquires a 25.1 per cent stake from Alcoa, a US aluminium producer, in their joint venture for $1.1 billion (Dh4 billion).
The deal includes 86 million Maaden shares, valued at $950 million (Dh3.4 billion), along with $150 million (Dh550 million) in cash.
The joint venture, established in 2009, operates as a fully integrated mining complex in Saudi Arabia.
It consists of two entities, Maaden Bauxite and Alumina Company, which manages a bauxite mine and alumina refinery, and Maaden Aluminium Company, which operates an aluminium smelter and casthouse, according to Arabian Gulf Business Insights.
As of June 30, 2024, Alcoa’s investment in the joint venture was valued at $545 million (Dh2 billion).
Alcoa must retain its Maaden shares for at least three years. After this period, one-third of the shares can be transferred each year in the third, fourth, and fifth years following the transaction's completion.
During the holding period, Alcoa can hedge and borrow against its Maaden shares, and the holding period may be shortened under certain conditions. Once the transaction is finalised, Alcoa will own 2 per cent of Maaden’s outstanding shares.
The transaction is pending regulatory approvals and is anticipated to close in the first half of 2025.