Alcoa Completes Divestiture of Stake in Ma’aden Joint Venture, Secures $1.35 Billion in Value and Positions for Strategic Flexibility
Alcoa Corporation (NYSE: AA; ASX: AAI), a global leader in bauxite, alumina, and aluminum production, has officially closed the sale of its full 25.1% ownership stake in the Ma’aden Joint Venture to its long-time partner, the Saudi Arabian Mining Company (Ma’aden). This transaction, completed under the terms of a binding share purchase and subscription agreement, marks a significant strategic move for Alcoa, enabling it to simplify its asset portfolio, realize substantial value, and reinforce its focus on core operations.
Under the terms of the agreement, Alcoa received a total consideration of approximately $1.35 billion. This includes 86 million newly issued Ma’aden shares—valued at roughly $1.2 billion at the time of closing—and a cash payment of $150 million. The cash component is expected to be primarily allocated toward transaction-related expenses and tax liabilities. As a result of this divestiture, Alcoa anticipates recording a gain of approximately $780 million in other income during the third quarter of 2025. As with past similar divestitures, this gain will be categorized as a special item on the Company’s financial statements.
Strategic Implications and Shareholder Value Creation
Alcoa’s President and CEO, William F. Oplinger, emphasized the significance of the transaction as a value-generating event for shareholders. “While today marks the end of our longstanding Joint Venture with Ma’aden, the successful closing of this transaction provides immediate value to Alcoa’s shareholders and enhances visibility in our financial reporting as we chart a new course forward,” Oplinger stated. “I want to sincerely thank the leadership of Ma’aden and the Kingdom of Saudi Arabia for their collaboration and partnership over the past 16 years. We look forward to continued engagement in our new role as shareholders of Ma’aden.”
The transaction aligns with Alcoa’s broader strategic goals, which include optimizing its asset base, increasing financial flexibility, and supporting its long-term vision for a more sustainable and efficient aluminum production platform. By monetizing its minority stake in a non-core asset, Alcoa is able to streamline its operations and reallocate capital toward growth areas and shareholder returns.
New Shareholder Role and Share Holding Terms
Although the divestiture concludes Alcoa’s role as an operating partner in the Joint Venture, the Company retains a financial interest in Ma’aden through its newly acquired equity position. Post-transaction, Alcoa now owns approximately 2% of Ma’aden’s total outstanding shares. However, the agreement includes specific conditions governing the disposition of these shares.
As stipulated, Alcoa is required to maintain its full Ma’aden shareholding for a minimum of three years from the closing date. Thereafter, it will be permitted to divest one-third of its shares after each of the third, fourth, and fifth anniversaries of the transaction’s closing. This structured holding period ensures a gradual and orderly exit from its Ma’aden equity position, while enabling Alcoa to capture any potential upside in Ma’aden’s stock performance over time.
Importantly, the agreement allows Alcoa, under defined circumstances, to hedge or borrow against its Ma’aden shares during the holding period. These provisions offer Alcoa a degree of financial agility without immediate liquidation. Moreover, the minimum holding timeline may be shortened under certain exceptional scenarios, allowing further optionality for Alcoa depending on market conditions and strategic priorities.
Background: A 16-Year Partnership
The Ma’aden Joint Venture was originally formed in 2009 as part of a national initiative by the Kingdom of Saudi Arabia to diversify its economy and develop domestic industrial capabilities. The Joint Venture brought together Ma’aden, the national mining company of Saudi Arabia, and Alcoa, one of the world’s leading aluminum producers, in a vertically integrated mining and metals complex.
The Joint Venture comprises two key business entities:
- Ma’aden Bauxite and Alumina Company (MBAC) – This unit operates a large-scale bauxite mine and an integrated alumina refinery in Ras Al Khair Industrial City.
- Ma’aden Aluminum Company (MAC) – This arm includes an aluminum smelter and casting facility, enabling the production of primary aluminum products for both domestic and international markets.
With Alcoa holding a 25.1% stake and Ma’aden retaining the remaining 74.9%, the partnership leveraged both companies’ complementary strengths—Alcoa’s technical expertise and global industry knowledge, and Ma’aden’s local leadership and access to critical resources. Over more than a decade, the venture helped transform Saudi Arabia into a major player in the global aluminum market.
Transaction Advisors and Legal Counsel
In support of the transaction, Alcoa engaged Citi as its exclusive financial advisor. Citi provided strategic counsel and valuation services, helping to structure and negotiate terms that aligned with Alcoa’s objectives. Additionally, White & Case LLP served as Alcoa’s legal counsel, advising on regulatory, transactional, and cross-border legal matters throughout the process.
Their collective involvement helped ensure the successful execution of a complex international transaction, conducted in alignment with Saudi Arabian and U.S. financial regulations.
Broader Industry Context and Alcoa’s Forward Path
The completion of this transaction comes at a time when the global aluminum industry is undergoing rapid transformation. Demand for aluminum—driven by the transition to renewable energy, electric vehicles, and sustainable packaging—continues to rise. However, producers are facing mounting pressure to decarbonize operations and secure more transparent, efficient supply chains.
Alcoa, with its longstanding commitment to innovation and sustainability, has been actively repositioning itself to meet these challenges. The divestiture of its Ma’aden stake is consistent with its strategy of focusing on assets where it can exercise full operational control and drive ESG leadership. The Company’s robust upstream portfolio, combined with its ongoing investments in low-carbon aluminum technologies such as the ELYSIS™ joint venture, position it well for long-term competitiveness.
Moreover, Alcoa’s strengthened balance sheet—supported by the cash and equity proceeds from this transaction—will give it enhanced flexibility to fund capital projects, reduce debt, and potentially return additional value to shareholders through buybacks or dividends.
A Continued Relationship, Reinvented
Although Alcoa is no longer directly involved in the operational oversight of the Ma’aden Joint Venture, its new role as a Ma’aden shareholder preserves a link between the two companies. As one of the most prominent mining and metals companies in the Middle East, Ma’aden continues to play a vital role in the region’s industrial growth. Through its ownership stake, Alcoa remains positioned to benefit from Ma’aden’s performance and market trajectory.
Looking ahead, management expects this transaction to serve as a model for disciplined portfolio management and strategic alignment. By unlocking significant shareholder value today while maintaining upside potential through equity ownership, the Company has demonstrated its commitment to financial prudence and operational focus.
The closing of the Ma’aden transaction marks both an end and a beginning for Corporation. It concludes a successful 16-year operating partnership that played a foundational role in developing Saudi Arabia’s aluminum industry. At the same time, it opens a new chapter for Alcoa—one defined by a renewed focus on operational control, financial flexibility, and sustainability leadership.
The $1.35 billion in total value secured through this divestiture strengthens balance sheet and enhances its ability to pursue future opportunities in a dynamic global marketplace. As the Company prepares to record a $780 million gain in the third quarter of 2025, this transaction stands out as a milestone moment in ongoing transformation journey.
About Alcoa
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 improved safety, sustainability, efficiency, and stronger communities wherever we operate.
