Saudi Arabian Mining Company (Ma’aden) signed a non-binding agreement to acquire 20.62% share in Aluminium Bahrain (Alba), which operates one of the world’s largest single-site smelters in the Kingdom of Bahrain. The purchase is in line with Ma’aden’s continued growth plans, with the aim of expanding its business ten times by 2040, with its aluminum business being a core contributing factor to that strategy.
“Harnessing the combined scale and expertise of both businesses to forge a new global champion will not only advance Ma’aden’s ambitions for aluminum, but also significantly boost the economic ties between Bahrain and Saudi Arabia,” said Bob Wilt, CEO of Ma’aden. “By bringing together two of the region’s most experienced players in the sector, we are setting the stage for stronger economic growth, enhanced job creation, and increased aluminum production capacity. This partnership will elevate our competitive edge on a global scale. Our continued commitment to our customers underpins this venture, ensuring that together, Ma’aden and Alba will provide access to a more expansive and reliable supply of aluminum. I look forward to working together with Alba as we better understand the ways in which we can come together to leverage this opportunity to deliver value for our employees, investors and economies.”
Ma’aden operates a fully integrated aluminum complex in Saudi Arabia, which including Ma’aden Bauxite and Alumina Company (with an estimated annual production of 5 million tonnes of dry weight bauxite and 1.8 million tonnes of alumina), Ma’aden Aluminium Company (with two potlines and a capacity of 780,000 tonnes per year of primary aluminum), and Ma’aden Rolling Company (with the capacity to produce 460,000 tons per year of aluminum can sheet). The integrated complex also includes a business for the production of caustic soda, a material that is essential for the refining of bauxite to alumina.
Alba is the world’s largest aluminum smelter (outside of China), with a production of more than 1.62 million tonnes of aluminum per year. The company commissioned a sixth potline in December 2018, which was shown to perform above expectations. The company is now conducting feasibility studies to install a seventh potline to expand its capacity even further.
Under the non-binding agreement, Ma’aden and Alba will commence due diligence towards a potential business combination involving segments of Maaden’s aluminum business unit. During this due diligence period, both companies will exchange information and evaluate the strategic and financial benefits of a potential business combination.
Combining these two businesses has the potential to reshape the global aluminum industry, positioning the merged entity as one of the largest aluminum producers worldwide. This partnership will create a larger, vertically integrated global champion with significant synergies offering advantages such as expanded production capacity, enhanced global presence, improved ESG performance, greater energy security, and significant shareholder value creation.
“The potential partnership accelerates Alba’s growth strategy, creating a global champion and cementing our position as the largest regional aluminum producer,” stated HE Khalid Al Rumaihi, Alba’s chairman of the board. “This combination will allow both companies to scale-up production, extend our global presence and explore new opportunities in clean energy. Our partnership will not only deepen the strong ties between Bahrain and Saudi Arabia, but also contribute to Bahrain’s economic diversification and job creation. This is a compelling proposition and an exciting moment for Alba, Ma’aden, and our respective stakeholders, and we look forward to sharing further updates in due course.”
The transaction is subject to regulatory approvals, corporate approvals, confirmatory due diligence, and valuation assessments.
Separating from Alcoa
Ma’aden’s integrated aluminum complex was established as a part of a joint venture with Alcoa in 2009, comprising Ma’aden Bauxite and Alumina Company and Ma’aden Aluminium Company. Recently, Ma’aden entered into a binding share purchase and subscription agreement with Alcoa, 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.
“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, president and CEO of Alcoa. “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.”
The transaction is expected to close in the first half of 2025, subject to regulatory approvals, approval by Ma’aden’s shareholders, and other customary closing conditions.
“As we continue in our growth journey, the acquisition of shares in a highly experienced, well developed regional and global aluminum player firmly supports our ambitions,” said Bob Wilt, CEO of Ma’aden. “This week we have announced a number of transactions that align with our strategic intent to strengthen and expand our business both regionally and internationally, further building mining as the third pillar of the Saudi economy.”