Alcoa said it was selling off its stake in a Saudi Arabia joint venture to improve its long-term competitiveness.

Alcoa announced it is selling its 25.1% stake in a joint venture with Saudi Arabia Mining Company (Ma’aden) to enhance its long-term competitiveness. The transaction is valued at $1.1 billion, consisting of Ma’aden stock and cash, including around 86 million shares of Ma’aden worth approximately $950 million. Under the terms of the deal, Alcoa is required to hold these shares for a minimum of three years.

Formed in 2009, the joint venture between Alcoa and Ma’aden resulted in the creation of the world’s largest and lowest-cost fully integrated aluminum production facility. Alcoa’s CEO, William Oplinger, explained that the sale simplifies the company’s portfolio, improves transparency regarding its investment in Saudi Arabia, and provides greater financial flexibility. Oplinger emphasized that this strategic move is crucial for improving Alcoa’s long-term competitiveness.

Following the announcement, Alcoa’s shares surged, extending a streak of gains over the past four sessions. The company’s stock has risen about 20% in the last year. The deal is expected to close in the first half of next year.