Saudi state-owned miner Ma’aden is exploring a merger of its aluminium business with Aluminium Bahrain (Alba), which would potentially form one of the largest producers in the global aluminium market.
The parties have sealed a non-binding agreement in this regard.
This proposed business combination could see Ma’aden integrating its subsidiaries, Ma’aden Aluminum Company (MAC) and Ma’aden Bauxite and Alumina Company (MBAC), into Alba, which would issue new shares to Ma’aden in return.
The transaction would also include rights to market and sell MAC’s products to Alba.
This merger aims to create a vertically integrated player, promising significant synergies and benefits such as increased production, improved global reach, and better environmental, social, and governance (ESG) performance.
Both companies are considering a cross-listing on the Saudi Stock Exchange, with further terms to be determined.
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By GlobalData
However, the deal is contingent on due diligence, corporate and regulatory approvals, and the finalisation of a definitive agreement.
The due diligence process will involve a strategic and financial assessment of the potential merger, which would bring together more than 75 years of combined experience.
However, Alba stressed that the prospect of these talks materialising into a definitive deal remains uncertain.
Alba board chairman Khalid Al Rumaihi said: “The potential partnership accelerates Alba’s growth strategy, creating a global champion and cementing our position as the largest regional aluminium producer. This combination will allow both companies to scale up production, extend our global presence and explore new opportunities in clean energy.”
Ma’aden CEO Bob Wilt stated: “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 aluminium production capacity. This partnership will elevate our competitive edge on a global scale.”
Alba, which reported production of more than 1.62 million metric tonnes per annum last year, counts Bahrain Mumtalakat Holding Company, SABIC Industrial Investments Company, and the General Public as shareholders.
The latest announcement follows US aluminium producer Alcoa‘s decision to offload its stake in the Ma’aden joint venture.
