Ma’aden strengthens its aluminium business with Alcoa stake acquisition.

In a strategic move that signals confidence in the future of Saudi Arabia’s growing mining and metals sector, Ma’aden, the Middle East’s largest mining company, has entered into a significant agreement with Alcoa Corporation, one of the world’s leading aluminium producers. This agreement marks a new chapter in their longstanding partnership, with Ma’aden poised to take full control of its aluminium assets, while Alcoa takes on a shareholder role.

The Share Purchase and Subscription Agreement, announced on 15 September 2024, will see Alcoa transfer its share in the Ma’aden Aluminium Company (MAC) and the Ma’aden Bauxite and Alumina Company (MBAC) to Ma’aden. In return, Alcoa will receive $150 million in cash and newly issued shares, amounting to approximately 2.21% of Ma’aden’s share capital. This shift from a joint venture partner to a shareholder not only consolidates Ma’aden’s control over its aluminium operations but also demonstrates Alcoa’s confidence in Ma’aden’s strategy for future growth.

This move comes at a pivotal moment for Ma’aden. Full ownership of MAC and MBAC will streamline the company’s aluminium operations, allowing for a more centralized management structure that is expected to accelerate growth in the coming years. Ma’aden’s CEO, Bob Wilt, expressed optimism about the new arrangement, remarking on the evolution of their partnership with Alcoa, which began in 2009. He said, “As we continue to grow our aluminium business, streamlining the management structure of this business is an important step forward for Ma’aden as we prepare for greater future growth and continue to build the mining sector as the third pillar of the Saudi economy.”

Additionally, the acquisition is set to enhance Ma’aden’s operational efficiency, enabling the company to exercise full control over its assets in the aluminium space—an area it has been committed to developing as part of Saudi Arabia’s broader economic diversification agenda. The move is seen as part of Ma’aden’s larger vision to become a global leader in mining and metals production.

For Alcoa, the agreement signifies more than just a restructuring of its portfolio. By transitioning from a direct stakeholder in MAC and MBAC to a shareholder in Ma’aden itself, Alcoa is showing its faith in the long-term vision of its former joint venture partner. William F. Oplinger, President and CEO of Alcoa, highlighted the advantages of the deal saying, “The transaction simplifies our portfolio, enhances visibility in the value of our investment in Saudi Arabia, and provides greater financial flexibility to Alcoa, an important part of improving our long-term competitiveness.”

Also, Alcoa’s continued involvement as a shareholder underscores the depth of its commitment to the Saudi market and its belief in Ma’aden’s potential to become a global force in aluminium production.

Moreover, this transaction is subject to regulatory and corporate approvals and is expected to close by Q1 2025. Once completed, Ma’aden will have total operational control over its aluminium production capabilities, positioning the company for continued success in the global metals market. As Saudi Arabia continues to build its mining sector, the Ma’aden-Alcoa deal serves as a testament to the collaborative efforts between global industry leaders and the kingdom’s ambitions for sustainable, diversified growth. With the backing of major international players like Alcoa, Ma’aden’s rise in the global aluminium market is set to accelerate.

Both companies were supported by key advisors throughout the deal. SNB Capital Company served as the financial advisor to Ma’aden, with AS&H Clifford Chance providing legal counsel. On Alcoa’s side, Citi acted as financial advisor, and White & Case served as legal counsel.

As the mining sector continues to play a pivotal role in Saudi Arabia’s vision 2030, Ma’aden’s strengthened position in the aluminium market reflects a clear path toward greater global influence and innovation in mining.