Alba-Ma’aden merger deadline extended to Q2 2025 amid efforts to form the world’s 7th largest aluminium producer

The deadline for the proposed merger between Aluminium Bahrain (Alba) and subsidiaries of Saudi Arabia’s Ma’aden has been extended to the second quarter of 2025. Originally anticipated to be finalised in Q1 2025, the extension was disclosed in a statement to the Bahrain Bourse on 22 December 2024.

“This extension will provide both companies with additional time to conduct a thorough due diligence and further evaluation of the potential strategic and financial benefits of this potential business combination,” the posting said.

Present scenario

The non-binding agreement, signed in September and initially set to expire on 31 December 2024, has been extended to 30 April 2025. Alba’s Chief Executive, Ali Al Baqali, had previously expressed optimism for an earlier conclusion.

“With the growth from Alba and the growth from Ma’aden, we will be the largest smelter in the region. At the same time, it will add a lot of advantages for both companies,” Al Baqali said in November.

Under the draft terms, Ma’aden would transfer its subsidiaries, Ma’aden Aluminium Company (MAC) and Ma’aden Bauxite and Alumina Company (MBAC), to Alba in exchange for newly issued Alba shares. The merger, if completed, would position the combined entity as the seventh-largest aluminium manufacturer globally.

Alba, Bahrain’s largest publicly listed company, boasts a market valuation nearing BHD 2 billion ($5.3 billion). The company is majority-owned by Bahrain Mumtalakat Holding Co (69.4 per cent) and Saudi Basic Industries Corporation (Sabic) (20.6 per cent). Earlier this month, Ma’aden’s shareholders approved a $1 billion agreement to acquire Sabic’s stake in Alba, further aligning the companies’ interests.

In October, Alba engaged advisors, including McKinsey & Co, PwC Bahrain, and Moelis & Co, to conduct due diligence on the proposed deal. Alba’s stock opened at BHD 1.35 on Monday, while Ma’aden’s stock traded at SAR49.15.

Financial performance

Alba reported a robust third-quarter profit of BHD54.5 million, a significant increase from BHD 17.3 million in the prior year, driven by an 8 per cent rise in revenue to BHD 433.5 million and slightly reduced costs. Meanwhile, Ma’aden recorded a profit of SAR 971.5 million ($258.6 million) in the third quarter, reversing a net loss of SAR 83.4 million a year earlier.

The London Metal Exchange’s aluminium price, a key industry benchmark, averaged $2,383 per tonne in Q3, up 11 per cent Y-o-Y, further supporting profitability.

Ma’aden subsidiary dynamics

Ma’aden Aluminium Company and Ma’aden Bauxite and Alumina Company collectively reported nine-month sales exceeding SAR 1 billion (US$ 266 million). However, the two entities have combined debts of SAR 5.65 billion (USD 1.50 billion) owed to Saudi Arabia’s Public Investment Fund (PIF), which owns 67 per cent of Ma’aden.

In September, Ma’aden announced a strategic restructuring to increase its ownership in these subsidiaries from 74.9 per cent to 100 per cent. This move, coupled with the proposed merger with Alba, highlights Ma’aden’s efforts to consolidate and strengthen its aluminium operations.

Information source: https://www.agbi.com/