:max_bytes(150000):strip_icc()/GettyImages-2036340894-336024d48e4f4915b5fd79da6b859a40.jpg "Alcoa Stock Rises After Company Sells Stake in Saudi Arabia Joint Venture")
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Key Takeaways
- Alcoa said it was selling off its stake in a Saudi Arabia joint venture to improve its long-term competitiveness.
- The company held 25.1% of the Saudi Arabia Mining Company, or Ma’aden, and the deal will give Alcoa $1.1 billion in Ma’aden stock and cash. The joint venture was formed in 2009.
- Alcoa shares rose to start the week.
Shares of Alcoa (AA) jumped Monday as the aluminum giant said it was selling its 25.1% stake in a joint venture with Saudi Arabia Mining Co., known as Ma’aden.
Alcoa said the transaction will net it $1.1 billion in Ma’aden stock and cash. That includes approximately 86 million Ma’aden shares valued at about $950 million. It requires Alcoa to hold the shares for a minimum of three years.
Alcoa shares, which have risen for four consecutive sessions, were up about 7% in morning trading. The shares are up about 20% over the past year.
The joint venture was formed in 2009. Alcoa said the combination “created the world’s largest, lowest cost fully integrated aluminum facility.”
Alcoa CEO William Oplinger said the move “simplifies our portfolio, enhances visibility in the value of our investment in Saudi Arabia and provides greater financial flexibility for Alcoa.” He called it “an important part of improving our long-term competitiveness.”
The deal is expected to close in the first half of next year.
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