Alcoa Completes $1.35B Sale of Ma’aden Joint Venture Stake

Alcoa Corporation (NYSE:AA) is one of the best basic materials stocks to invest in. On July 2, Alcoa announced the completion of the sale of its 25.1% ownership interest in the Ma’aden joint venture to the Saudi Arabian Mining Company, Ma’aden. The transaction was conducted under a binding share purchase and subscription agreement and resulted in Alcoa receiving 86 million Ma’aden shares valued at $1.2 billion, in addition to $150 million in cash.

Before this, Alcoa held a 25.1% stake in the JV, with Ma’aden owning the remaining 74.9%. Following the divestment, Alcoa’s ownership in Ma’aden has been reduced to 2% of the current outstanding shares.  Under the agreement, Alcoa is required to retain its Ma’aden shares for a minimum period of 3 years.

A long pipeline snaking through a rural landscape – symbolizing the companies midstream energy services.

After the initial holding period, Alcoa can sell one-third of the shares on each of the third, fourth, and fifth anniversaries of the transaction’s closing date. The minimum holding period may also be shortened under specific circumstances.

Alcoa Corporation (NYSE:AA) engages in the bauxite mining, alumina refining, aluminum production, and energy generation business internationally.

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Disclosure: None. This article is originally published at Insider Monkey.