Saudi Arabian Mining Company (Maaden) is set to acquire a 25.1% stake from US aluminium producer Alcoa in their joint venture for $1.1 billion (Dh4 billion).
The transaction includes 86 million Maaden shares, valued at $950 million (Dh3.4 billion), plus $150 million (Dh550 million) in cash.
Established in 2009, the joint venture operates a comprehensive mining complex in Saudi Arabia. It comprises Maaden Bauxite and Alumina Company, which oversees a bauxite mine and alumina refinery, and Maaden Aluminium Company, managing an aluminium smelter and casthouse.
As of June 30, 2024, Alcoa’s investment in the joint venture was valued at $545 million (Dh2 billion). Alcoa is required to retain its Maaden shares for at least three years, with the option to transfer one-third of the shares annually in the third, fourth, and fifth years after the transaction’s completion.
During the holding period, Alcoa has the ability to hedge and borrow against its Maaden shares. The holding period may be shortened under specific conditions. Upon finalization, Alcoa will own 2% of Maaden’s outstanding shares.
The deal is subject to regulatory approvals and is expected to close in the first half of 2025.