CMA OKs Maaden capital hike to buy Alcoa, AWA’s stakes in two subsidiaries

Logo of Saudi Arabian Mining Co. (Maaden)

The Capital Market Authority (CMA) approved, on June 2, Saudi Arabian Mining Co.’s (Maaden) request to increase its capital from SAR 38.03 billion to SAR 38.89 billion, through issuing 85.98 million ordinary shares.

The capital hike aims to finance the full acquisition of Alcoa Saudi Smelting Investments B.V.'s stake in Maaaden Aluminium Co. (MAC) as well as the entire stake held by AWA Saudi Ltd in Maaden Bauxite and Alumina Co. (MBAC).

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In a statement, the CMA said a shareholders circular will be published within sufficient time before the extraordinary general meeting (EGM) of Maaden. The circular should include all relevant information that shareholders need to know before making an informed decision when voting on the offer, including the offer information and risk factors.

In the event of an inability to understand the content of the circular, it is best to consult a licensed financial advisor.

The CMA's approval should never be considered as an endorsement of the acquisition's feasibility. It merely means that the legal requirements as per the Capital Market Law and its implementing regulations have been met.​​

In September 2024, Maaden signed a share purchase and subscription agreement (SPSA) with Alcoa Corporation (guarantor), AWA Saudi Limited (first seller) and Alcoa Saudi Smelting Inversiones S.L. (second seller).

Under the deal, Maaden will acquire the entire 25.1% stake (128.01 million ordinary shares) held by AWA in MBAC. It will also buy out Alcoa Saudi’s 25.1% stake (165 million ordinary shares) in Maaden Aluminium Co.

Based on a valuation of SAR 4.13 billion, the acquisition consideration will consist of a cash payment by Maaden to the first seller of SAR 562.5 million, with the remaining acquisition consideration of (SAR 3.56 billion) being paid through the issuance of new shares in Maaden to the sellers. This was calculated on a formula based on the volume-weighted average price (VWAP) of the shares of Maaden, representing about 2.21% of the share capital of Maaden after completion of the acquisition.

MBAC's capital is SAR 5.1 billion, divided into 510 million ordinary shares, at a par value of SAR 10 per share, of which Maaden currently owns 74.9%.

Meanwhile, MAC's current capital is SAR 6.57 billion, divided into 657.38 million ordinary shares, at a par value of SAR 10 per share, of which Maaden currently owns 74.9%.