Australian listed shares of US aluminium giant Alcoa surged following the announcement of a significant deal to sell a 25.1% stake in its joint venture with Saudi Arabian mining company Ma’aden back to its partner.
The transaction, valued at approximately $1.6 billion, will see Alcoa receive $1.1 billion in cash and $150 million in additional funds, along with around 86 million Ma’aden shares, worth roughly $950 million. This deal is expected to close in the first half of 2025.
Following the news, Alcoa’s shares on the ASX increased by 5.7%, reaching intraday highs of $48.96.
Alcoa CEO William Oplinger noted that the sale simplifies the company's portfolio, enhances the visibility of its investment in Saudi Arabia, and provides greater financial flexibility.
The joint venture, established in 2009, is a fully integrated mining complex in Saudi Arabia, with Ma’aden retaining a 74.9% stake.
The sale aligns with Alcoa’s broader strategy of reducing output and investments globally as part of its cost-cutting measures. This includes the recent $3.4 billion acquisition of its Alcoa World Alumina and Chemicals (AWAC) joint venture with Alumina, which resulted in Alcoa’s listing on the ASX.