Talco Industrial Group, a leading company in the Saudi Arabian metals sector, announced that it has reached a preliminary agreement paving the way for the acquisition of a majority stake in Eastern Aluminum Extrusion Factory. This strategic move comes as part of Talco's efforts to expand its operations and strengthen its market position, in line with the Kingdom's broader economic objectives.
According to the official disclosure published on the Saudi Stock Exchange (Tadawul) website, the board of directors of TALCO has approved proceeding with the due diligence process through the company's advisors. This process aims to conduct a comprehensive evaluation of all financial, operational, and legal aspects of Al Sharqia Company, in preparation for finalizing the transaction to acquire 60% of its share capital. The final purchase agreement is scheduled to be signed after the completion of feasibility studies and the determination of the company's fair value by a financial advisor to be appointed later.
General context and importance of the deal within the framework of Vision 2030
This deal cannot be viewed in isolation from the broader economic context of Saudi Arabia. Under Vision 2030, the Kingdom seeks to diversify its economy and reduce its reliance on oil by empowering and developing the industrial sector as a key pillar. The aluminum industry is a vital sector that supports other important industries such as construction, transportation, automotive, and renewable energy. This potential acquisition reflects a trend toward consolidating major industrial entities to enhance their competitiveness both domestically and internationally, and to contribute effectively to achieving the goals of the National Industrial Development and Logistics Program (NIDLP).
Expected impact on the Saudi aluminum sector
The completion of this acquisition is expected to create a more integrated and robust industrial entity. TALCO has a strong market presence, while Eastern Factory specializes in aluminum extrusion, a precision manufacturing process used to produce aluminum profiles in various shapes to meet the needs of architectural and industrial projects. This integration will lead to cost savings, improved production efficiency, and an expanded product portfolio for the new entity. Domestically, this deal will enhance the ability to meet the growing demand for manufactured aluminum products, particularly given the accelerated pace of major projects in the Kingdom. Regionally, it will boost the competitiveness of Saudi products in the rapidly developing construction and industrial markets of the GCC and the wider Middle East.
