Alcoa to receive $1.1 billion of proceeds in
Ma’aden shares and cash
Transaction simplifies Alcoa’s portfolio in
Saudi Arabia and provides greater financial flexibility
Alcoa (NYSE: AA, ASX: AAI) (“Alcoa” or the “Company”) announced
today that it has entered into a binding share purchase and
subscription agreement (the “Agreement”) with Saudi Arabian Mining
Company (“Ma’aden”), under which Alcoa will sell its full ownership
interest of 25.1% in the Ma’aden Joint Venture to Ma’aden for
approximately $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, as a fully integrated
mining complex in the Kingdom of Saudi Arabia, and today comprises
two entities: the Ma’aden Bauxite and Alumina Company (“MBAC”; the
bauxite mine and alumina refinery) and the Ma’aden Aluminium
Company (“MAC”; the aluminum smelter and casthouse). 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.
Pursuant to the terms of the Agreement, 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 (the “holding
period”). 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.
“We deeply value our partnership with Ma’aden. We are confident
that under the new arrangement, MBAC and MAC are well-positioned
for success,” said William F. Oplinger, Alcoa’s President and CEO.
“The transaction simplifies our portfolio, enhances visibility in
the value of our investment in Saudi Arabia and provides greater
financial flexibility for Alcoa, an important part of improving our
long-term competitiveness.”
“Since 2009, Alcoa has been a valued partner of Ma’aden, and our
aluminium business has benefited substantially from our strategic
partnership,” said Bob Wilt, Ma’aden’s CEO. “We look forward to
future opportunities to collaborate as we continue to build the
mining sector into the third pillar of the Saudi economy.”
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.
About Alcoa Corporation
Alcoa (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. With a values-based
approach that encompasses integrity, operating excellence, care for
people and courageous leadership, our purpose is to Turn Raw
Potential into Real Progress. Since developing the process that
made aluminum an affordable and vital part of modern life, our
talented Alcoans have developed breakthrough innovations and best
practices that have led to greater efficiency, safety,
sustainability, and stronger communities wherever we operate.
Dissemination of Company Information
Alcoa intends to make future announcements regarding company
developments and financial performance through its website,
www.alcoa.com, as well as through press releases, filings
with the Securities and Exchange Commission, conference calls and
webcasts.
Cautionary Statement on Forward-Looking Statements
This press release contains statements that relate to future
events and expectations about Alcoa’s sale of its interest in the
Ma’aden joint venture, including but not limited to Alcoa’s
expectations relating to the completion and timing of the
transaction, and as such constitute forward-looking statements
within the meaning of the Private Securities Litigation Reform Act
of 1995. Forward-looking statements include those containing such
words as “aim,” “ambition,” “anticipates,” “believes,” “could,”
“develop,” “endeavors,” “estimates,” “expects,” “forecasts,”
“goal,” “intends,” “may,” “outlook,” “plans,” “potential,”
“projects,” “reach,” “seeks,” “sees,” “should,” “targets,” “will,”
“working,” “would,” or other words of similar meaning. All
statements by Alcoa that reflect expectations, assumptions or
projections about the future, other than statements of historical
fact, are forward-looking statements. Forward-looking statements
are not guarantees of future performance and are subject to known
and unknown risks, uncertainties, and changes in circumstances that
are difficult to predict. Although Alcoa believes that the
expectations reflected in any forward-looking statements are based
on reasonable assumptions, it can give no assurance that these
expectations will be attained, and it is possible that actual
results may differ materially from those indicated by these
forward-looking statements due to a variety of risks and
uncertainties. Additional information concerning factors that could
cause actual results to differ materially from those projected in
the forward-looking statements is contained in Alcoa’s filings with
the Securities and Exchange Commission. Alcoa disclaims any
obligation to update publicly any forward-looking statements,
whether in response to new information, future events or otherwise,
except as required by applicable law.
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version on businesswire.com: https://www.businesswire.com/news/home/20240915281567/en/
Investor Contact: Yolande Doctor Yolande.B.Doctor@Alcoa.com
Media Contact: Courtney Boone Courtney.Boone@Alcoa.com
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