Alba eyes strategic partnership with Ma’aden’s aluminium business in new agreement

Aluminium Bahrain B.S.C. (Alba) has taken a major step towards reshaping the global aluminium landscape. In its meeting on September 16, 2024, the company’s Board of Directors approved entering into a non-binding agreement with Saudi Arabian Mining Company (Maaden) to begin due diligence on a potential business combination.

This strategic partnership will position the merged entity as one of the world’s largest aluminium producers. The combination is set to deliver significant synergies, including expanded production capacity, a strengthened global presence, enhanced ESG (Environmental, Social, and Governance) performance, and improved energy security. By creating a vertically integrated aluminium giant, the collaboration promises to unlock substantial shareholder value, cementing its place as a formidable player in the industry.

Both companies are now preparing for the next stage of negotiations, which could herald a transformative moment for the aluminium sector.

Alba's Chairman of the Board, HE Khalid Al Rumaihi, stated, "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. 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."

Adding further, Ma'aden Chief Executive Officer Bob Wilt said, "Harnessing the combined scale and expertise of both businesses to forge a new global champion will not only advance Ma'aden's ambitions for aluminium but also significantly boost the economic ties between Bahrain and Saudi Arabia. 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. 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 aluminium. 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."

During the due diligence period, both companies will exchange information and evaluate a business combination's strategic and financial benefits. There is no assurance that these discussions will lead to a definitive agreement or a completed transaction.

As part of the discussions on the non-binding agreement, Alba and Ma'aden discussed, among other things, the potential transaction structure for implementing their proposed business combination and the potential cross-listing of Alba on the Saudi Exchange.

Subject to regulatory approvals (including, without limitation, the Central Bank of Bahrain), corporate approvals, confirmatory due diligence, and valuation assessments, the proposed structure would involve Ma'aden making an in-kind contribution. This would include Ma'aden contributing the entire share capital of two of its subsidiaries, Ma'aden Aluminium Company (MAC) and Ma'aden Bauxite and Alumina Company (MBAC), along with contractual rights concerning the marketing and sale of products produced by MAC, to Alba. In exchange, Alba would issue new shares to be allotted to Ma'aden.

Alba and Ma'aden have also agreed to discuss Alba's cross-listing on the Saudi Exchange during the next phase of the proposed business combination.

Alba emphasises that the transaction is subject to, without limitation, confirmatory due diligence, receipt of all corporate (board and shareholder) and regulatory approvals and signing of definitive agreements. Alba will provide further information to the market and regulators as appropriate.