Alcoa to Sell AU$1.6 Billion Stake in Joint Venture with Maaden

Highlights:

• Significant Sale: Alcoa Corporation is selling its entire 25.1% stake in its joint venture with Saudi Arabian Mining Company (Ma’aden) for $1.1 billion USD (AU$1.6 billion).
• Transaction Details: The deal includes approximately 86 million shares of Ma’aden valued at $950 million USD and an additional $150 million USD in cash.
• Market Reaction: At the time of writing, Alcoa's stock has jumped 6%, signaling investor confidence in the company’s strategic move to streamline its portfolio.

Major Transaction Details

Alcoa Corporation (ASX: AAI) has announced the sale of its entire 25.1% interest in a joint venture with Saudi Arabian Mining Company (Ma’aden) for $1.1 billion USD (AU$1.6 billion). The transaction includes around 86 million Ma’aden shares, valued at $950 million USD, along with an additional $150 million USD in cash.

Background of the Joint Venture

Established in 2009, the joint venture operates as a fully integrated mining complex in Saudi Arabia, consisting of the Ma’aden Bauxite and Alumina Company and the Ma’aden Aluminium Company. Alcoa held a 25.1% stake in the venture, while Ma’aden controlled the remaining shares. As of June, the carrying value of Alcoa’s investment stood at $545 million USD.

Financial Impact

At the time of writing, Alcoa shares have surged by 6% following the announcement, reflecting investor optimism about the transaction. This move marks a significant divestment for Alcoa, as the company streamlines its portfolio and focuses on core assets. The deal's completion will see Ma’aden fully owning the joint venture, reinforcing its position in the global mining industry.

Future Outlook

This transaction is a strategic move for Alcoa, allowing it to reallocate capital and strengthen its balance sheet. For Ma’aden, the acquisition of Alcoa’s stake further solidifies its foothold in the mining sector, particularly in aluminum production. The deal underscores the ongoing consolidation in the mining industry, as companies seek to optimize their operations and increase shareholder value.

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