In a strategic move aimed at strengthening its position in the Saudi industrial sector and expanding its investment base, United Wire Factories Company (ASLAK) signed a definitive agreement to sell and purchase shares to acquire a 40% stake in Al-Ra'idah Industrial Investment Company. This transaction, valued at SAR 92,818,668, will be fully paid through a capital increase for ASLAK by issuing new shares (compensation shares) to the selling shareholders of Al-Ra'idah.
Details of the financial structure of the deal
Under the agreement, and subject to obtaining the necessary regulatory approvals, Aslak's capital will be increased from SAR 280.8 million to approximately SAR 319.77 million, an increase of approximately SAR 38.9 million, representing a 13.88% increase. This will be achieved through the issuance of approximately 3.9 million new shares. The fair value of the new shares was determined based on a thorough valuation overseen by the financial advisor. The value of Aslak's share for the purpose of the transaction was calculated using the volume-weighted average price (VWAP) of the last 60 trading days ending November 30, 2025, resulting in an estimated share price of SAR 23.8149.
Time context and strategic background
This agreement comes as the culmination of a series of negotiations and due diligence studies, as the company had previously announced on the Saudi Stock Exchange (Tadawul) website on December 31, 2024, the signing of a preliminary memorandum of understanding for this purpose, followed by the appointment of Al Khair Capital Saudi Arabia as a financial advisor in January 2025. These steps reflect the company's commitment to governance and transparency in completing major acquisition deals.
Economic importance and impact of the deal
This acquisition is particularly significant given the rapid growth of the construction, building materials, and industrial sectors in Saudi Arabia, driven by the ambitious Vision 2030 projects. Aslak's acquisition of a substantial stake in Al-Ra'idah is expected to contribute to operational integration and product diversification, thereby strengthening the company's market share and opening new avenues for growth. Furthermore, the share swap transaction reflects the confidence of the selling shareholders (the Al-Sari' family) in Aslak's future, as they will retain a 12.19% ownership stake in the company after the increase.
Changes in ownership structure and risks
The company clarified that the completion of the transaction will reduce the ownership percentage of current shareholders in Aslak to 87.81%, which may have a slight impact on their voting power. The parties agreed on an exchange ratio that grants the selling shareholders (Mohammed Nasser Al-Sari’ and his brothers and cousins) approximately 1.2457 new Aslak shares for each share they own in Al-Ra’idah. The transaction remains subject to several preconditions related to contractual and regulatory obligations, with guarantees and undertakings in place to protect Aslak’s rights in the event of any undisclosed liabilities.
