The Saudi Basic Industries Corporation (SABIC) has signed 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. These moves have a total combined enterprise value of $950 million.
SABIC
SABIC divests its EP business and ETP business in the Americas and Europe
This will help SABIC promote future, profitable growth and its goal to maximise value. SABIC hopes to improve returns, focus on high-margin markets and products where it has a clear competitive advantage, recycle capital, and improve free cash flow. The company hopes these transactions will reposition it for longer-term success by refocusing financial resources and management attention.
“The Board endeavoured to achieve these transactions, which represent a significant milestone in the execution of our strategy to further optimise our portfolio and maximise shareholder value by enhancing the Company’s cash generation capacity and achieving the highest possible return on our global businesses,” said Khalid H. Al-Dabbagh, Chairman of the Board of Directors of SABIC.
Abdulrahman Al-Fageeh, Chief Executive Officer of SABIC, added, “These transactions represent a continuation of our Portfolio Optimisation 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 seamlessly.”
“These transactions are a clear demonstration of our disciplined approach and decisive execution regarding capital allocation and active portfolio management,” continued Salah Al-Hareky, Chief Financial Officer of SABIC. “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.”
Both transactions ensure SABIC maintains its product’s strategic access through exports to Europe and the Americas, which is a priority for the company.
About the European Petrochemicals (EP) business
SABIC will sell its EP business to AEQUITA for an enterprise value of $500 million.
The business produces and markets a variety of products, including:
- Ethylene.
- Propylene.
- Low- and high-density polyethene (LDPE, LLDPE, and HDPE).
- Polypropylene (PP).
- Value-added polymer compounds.
Additionally, the business also manages multiple manufacturing sites, including in Teesside, the United Kingdom; Geleen, the Netherlands; Gelsenkirchen, Germany; and Genk, Belgium.
Dr.-Ing. Axel Geuer, President & Co-CEO of AEQUITA, said, “This transaction represents a further step in the expansion of our European chemicals platform. The assets are highly synergistic with the olefins and polyolefins business we recently acquired from LYB; with complementary markets, infrastructure and operational capabilities, we see substantial potential to realise synergies and drive operational improvements across both businesses. Under AEQUITA’s active ownership model, our focus will be on supporting the teams on the ground, ensuring a seamless integration, and building a scaled, competitive platform positioned for long-term, sustainable value creation.”
About the Engineering Thermoplastics (ETP) business
Meanwhile, SABIC is selling its regional ETP business in the Americas and Europe to MUTARES for an enterprise value of $450 million. This is in addition to an agreed earn-out mechanism, which generates further value to SABIC based on the business’s free cash flow generation over the next four years, as well as in the event of a future sale by MUTARES.
The business produces:
- Polycarbonate (PC).
- Polybutylene terephthalate (PBT).
- Acrylonitrile butadiene styrene (ABS) resin and compounds.
Additionally, the business manages manufacturing sites in Mt. Vernon, Ottawa, Bay St. Louis and Burkville, United States; Tampico, Mexico; Campinas, Brazil; Cartagena, Spain; and Bergen op Zoom, the Netherlands.
“The Engineering Thermoplastics (ETP) business in the Americas and Europe has a highly skilled workforce and strong customer relationships. Under focused ownership, our priority is to ensure continuity, support employees through the transition, and unlock the full potential of our asset base as a standalone ETP platform,” concludes Robin Laik, Co-Founder and CEO of MUTARES.