As part of a restructuring during a recession in the sector, SABIC of Saudi Arabia has agreed to sell its European petrochemical business and its Engineering Thermoplastics business in Europe and the Americas for a combined enterprise value of $950 million.
In early trading on Thursday in Riyadh, shares of the chemicals company dropped as much as 4.8% to 48.2 riyals ($12.85) per share, the lowest level in almost 17 years. Over the past 12 months, the stock has down 26.4%. For an enterprise value of $500 million, SABIC has agreed to sell its European petrochemical (EP) business, which comprises production facilities in Germany and the United Kingdom, to Munich-based investment group AEQUITA.
Additionally, for an enterprise value of $450 million, it is selling the ETP business in the Americas and Europe to the German holding company Mutares. The company has production facilities in Brazil, Spain, the US, and Canada. Oil giant Aramco, which owns 70% of it, is reducing expenses and selling assets to balance capital expenditures with decreased oil prices and shareholder dividends.
CEO Abdulrahman Al-Fageeh said in a statement, “These transactions are an extension of our portfolio optimization program, which began in 2022 and included earlier actions, such as the divestment of Functional Forms, Hadeed, and Alba.
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