Alcoa has agreed to offload its 25.1% stake in the Ma'aden JV to the Saudi Arabian Mining Company (Ma'aden) for approximately $1.1bn (SR4.13bn).

The binding share purchase and subscription agreement includes $950m in Ma'aden shares and $150m in cash as consideration.

Established in 2009, the Ma'aden JV includes the Ma'aden Bauxite and Alumina Company and the Ma'aden Aluminium Company.

Alcoa's investment was valued at $545m as of 30 June 2024.

The transaction will result in Alcoa owning around 2% of Ma'aden's current shares outstanding.

It stipulates that Alcoa will retain the Ma'aden shares for a minimum of three years, with the option to transfer one-third of the shares after each subsequent anniversary of the transaction's closing.

This move will grant Ma'aden full ownership and control over the integrated mining complex's operations and management.

The acquisition is expected to streamline Ma'aden's aluminium business operations.

Alcoa president and CEO William F Oplinger said: “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.”

Pending regulatory and shareholder approvals, the deal is due to be finalised in the first half of 2025.

Ma’aden CEO Bob Wilt said: “Ma’aden formed our joint venture with Alcoa in 2009, as part of our drive to develop a world-class aluminium business. Now it is time for our partnership to evolve. 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.”

Last month, Alcoa acquired Australia-based Alumina to strengthen its market position as a pure play, upstream aluminium company.