(Bloomberg) -- Alcoa Corp. will receive $1.1 billion in cash and stock in Saudi Arabian Mining Co. as part of a deal that will involve the Pittsburgh-based firm selling its stake in two metals plants in northern Saudi Arabia.

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Maaden, as the Saudi firm is known, signed a deal with Alcoa to purchase its holdings in a bauxite facility and an aluminum smelter for 563 million riyals ($150 million) in cash and 3.6 billion riyals of stock in the Riyadh-based miner, according to a statement Sunday.

Maaden will wholly own its aluminum business, and Alcoa will hold a 2.2% stake in Maaden once the deal is completed.

“The transaction simplifies our portfolio, enhances visibility in the value of our investment in Saudi Arabia and provides greater financial flexibility to Alcoa, an important part of improving our long-term competitiveness,” Alcoa Chief Executive Officer William Oplinger said in the statement.

Alcoa formed a joint venture with Maaden in 2009 to develop a $10.8 billion bauxite mine, refinery, smelter and other facilities. It was part of a push by Saudi Arabia to diversify beyond oil production and exploit the country’s other natural resources.

Maaden has since become an important part of the kingdom’s strategy to develop into a key supply chain and processing hub for metals and minerals needed for the energy transition, including for electric vehicles. Maaden formed a joint venture with Saudi Arabia’s powerful sovereign wealth fund to invest in minerals around the world, and signed its first deal last year involving the acquisition of a 10% stake in Vale SA’s base metals unit.

“As we continue to grow our aluminium business, streamlining the management structure of this business is an important step forward for Maaden as we prepare for greater future growth and continue to build the mining sector as the third pillar of the Saudi economy,” Bob Wilt, Maaden CEO, said.

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