Alcoa to receive $1.1 billion of proceeds in Ma’aden shares and cash

Transaction simplifies Alcoa’s portfolio in Saudi Arabia and provides greater financial flexibility

PITTSBURGH--(BUSINESS WIRE)-- Alcoa (NYSE: AA, ASX: AAI) (“Alcoa” or the “Company”) announced today that it has entered into a binding share purchase and subscription agreement (the “Agreement”) with Saudi Arabian Mining Company (“Ma’aden”), under which Alcoa will sell its full ownership interest of 25.1% in the Ma’aden Joint Venture to Ma’aden for approximately $1.1 billion. The transaction consideration comprises approximately 86 million shares of Ma’aden (valued at ?$950 million based on the volume-weighted average share price of Ma’aden for the last 30 calendar days as of September 12, 2024) and $150 million in cash.

The joint venture was created in 2009, as a fully integrated mining complex in the Kingdom of Saudi Arabia, and today comprises two entities: the Ma’aden Bauxite and Alumina Company (“MBAC”; the bauxite mine and alumina refinery) and the Ma’aden Aluminium Company (“MAC”; the aluminum smelter and casthouse). Alcoa currently owns 25.1% of the joint venture and Ma’aden owns 74.9%. The carrying value of Alcoa’s investment was $545 million as of June 30, 2024.

Pursuant to the terms of the Agreement, Alcoa will hold its Ma’aden shares for a minimum of three years, with one-third of the shares becoming transferable after each of the third, fourth and fifth anniversaries of closing of the transaction (the “holding period”). During the holding period, Alcoa would be permitted to hedge and borrow against its Ma’aden shares. Under certain circumstances, such minimum holding period would be reduced. Pro forma for the transaction, Alcoa would own approximately 2% of Ma’aden’s current shares outstanding.

“We deeply value our partnership with Ma’aden. We are confident that under the new arrangement, MBAC and MAC are well-positioned for success,” said William F. Oplinger, Alcoa’s President and CEO. “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.”

“Since 2009, Alcoa has been a valued partner of Ma’aden, and our aluminium business has benefited substantially from our strategic partnership,” said Bob Wilt, Ma’aden’s CEO. “We look forward to future opportunities to collaborate as we continue to build the mining sector into the third pillar of the Saudi economy.” see & read more on
https://news.alcoa.com/press-releases/press-release-details/2024/Alcoa-Announces-Agreement-to-Sell-its-25.1-Stake-in-Maaden-Joint-Venture-to-Maaden/default.aspx