Saudi Eastern Province

Saudi Maaden set to acquire African group

Maaden Aluminium in Ras Al Khair, Saudi Arabia

Saudi Arabia’s largest mining company, Ma’aden, is set to make its first international acquisition move with the purchase of a leading fertiliser distribution company in Africa.

The publicly-listed Saudi Arabian mining company will acquire an 85 per cent stake in the Mauritius-based Meridian Group in an all cash deal that will provide one of the Middle East’s largest phosphate producers with 3,000 staff and a network of operations across southern Africa, from Malawi to Mozambique, Zimbabwe and Zambia.

HSBC acted as Ma’aden’s financial advisor on the deal, and Baker McKenzie was the Saudi company’s legal advisor for this pioneering acquisition.

“This acquisition marks a very important step in Ma’aden’s strategy to build global distribution channels for our fertiliser products,” remarked Darren Davis, president and CEO of Ma’aden.

“As we continue to build one of the largest producers and exporters of phosphate fertilisers in the world, ensuring an efficient route to key growth markets is critical to our success,” he stated.

Phosphate is used to produce fertiliser that is essential in replacing the phosphorous mineral that is removed from soil when agricultural plants are harvested.

The southeast African market, like most of the African continent, is witnessing increased demand for phosphate fertilisers that industry analysts expect to continue growing by 5 per cent annually over the next decade, fueled by population growth and increasing education in the use of fertilisers.

“Ma’aden is acquiring unparalleled access to complementary distribution, blending and product development capabilities in this fast-growth region,” said Hassan Al Ali, senior vice president for Phosphate at Ma’aden.

The deal is expected to be completed by September for an undisclosed fee, according to parties linked to the deal. The Saudi global mining giant will secure the remaining 15 per cent of Meridian’s equity over four years on agreed terms linked to the performance of the African company.