The Saudi Basic Industries Corporation (SABIC) today announced the signing of two strategic transactions to divest its European Petrochemicals (EP) business to AEQUITA and its Engineering Thermoplastics (ETP) business in the Americas and Europe to MUTARES, for a total combined enterprise value of $950 million.
These transactions represent significant steps in the advancement of SABIC’s strategy and constitute a core component of its broader portfolio optimization program. The divestments together establish a strong foundation for future profitable growth and reinforce the Company’s long-term strategic positioning for maximum value add.
These efforts are a continuation of SABIC’s plans to improve returns, focus on high margin markets and products where we have clear competitive advantage, recycle capital to higher-return opportunities and improve free cash flow, whilst continuing to serve its global customers and maximize shareholder value. Additionally, these transactions do not impact the technology and innovation focus and commitment that SABIC has for its customers.
Commenting on the transactions, Chairman of the Board of Directors of SABIC Khalid H. Al-Dabbagh, said: “The Board endeavored to achieve these transactions, which represent a significant milestone in the execution of our strategy to further optimize our portfolio and maximize shareholder value by enhancing the Company’s cash generation capacity and achieving the highest possible return on our global businesses.
Abdulrahman Al-Fageeh, Chief Executive Officer of SABIC, said: “These transactions represent a continuation of our Portfolio Optimization Program, which started in 2022 and included previous actions, such as the divestment of Functional Forms, Hadeed and Alba. This strategic approach allows us to actively reshape our portfolio and sharpen our focus on areas where SABIC has clear and sustainable competitive advantages in a rapidly changing landscape”.
“I am pleased that both AEQUITA and MUTARES will work with us in the future to ensure that we continue to serve our global customers in a seamless manner,” Al-Fageeh also stated.
Salah Al-Hareky, Chief Financial Officer of SABIC, said: “These transactions are a clear demonstration of our disciplined approach and decisive execution regarding capital allocation and active portfolio management. By unlocking value to fund higher-return opportunities, we are improving the quality and efficiency of our capital employed and enhancing the group’s ROCE over time. Together, these actions position SABIC to deliver sustainable returns and create value for our shareholders.
These transactions reposition SABIC for longer-term success by refocusing financial resources and management attention towards growth areas where the Company has clear competitive advantages.
source : Sabic
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