Alcoa To Sell 25.1% Stake In Ma'aden Joint Venture To Saudi Mining Company For $1.1 Bln

(RTTNews) - Alcoa Corp (AA, AAI.AX), aluminum manufacturer, said Sunday that it agreed to sell its full ownership interest of 25.1% in the Ma'aden Joint Venture to Saudi Arabian Mining Company Ma'aden for about $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, 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.

As per the terms of the deal, 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. 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.

The transaction is expected to close in the first half of 2025.