Alcoa Corporation has announced an agreement to sell its 25.1% stake in the Ma’aden joint venture to Ma’aden for approximately $1.1 billion. The transaction consideration includes approximately 86 million shares of Ma’aden valued at $950 million and $150 million in cash. Alcoa's carrying value of its investment in the joint venture was $545 million as of June 30, 2024.
Following the sale, 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 the transaction closing. Pro forma for the transaction, Alcoa would own approximately 2% of Ma’aden’s current shares outstanding.
Alcoa's President and CEO, William F. Oplinger, mentioned that the transaction simplifies the company's portfolio, enhances visibility in the value of its investment in Saudi Arabia, and provides greater financial flexibility. Ma’aden’s CEO, Bob Wilt, expressed confidence in future opportunities to collaborate as they continue to build the mining sector in Saudi Arabia.
The transaction is subject to regulatory approvals, approval by Ma’aden’s shareholders, and other customary closing conditions and is expected to close in the first half of 2025. In connection with the transaction, Citi is acting as Alcoa’s exclusive financial advisor, and White & Case LLP is acting as its legal counsel.
Alcoa Corporation (NYSE: AA, ASX: AAI) is a global industry leader in bauxite, alumina, and aluminum products with a vision to reinvent the aluminum industry for a sustainable future. The company intends to make future announcements regarding company developments and financial performance through its website, press releases, filings with the Securities and Exchange Commission, conference calls, and webcasts. Today the company's shares have moved 6.3% to a price of $34.58. If you want to know more, read the company's complete 8-K report here.
