SABIC completes US$950M divestments to realign global petrochemicals strategy

EUROPE – SABIC has finalized the sale of two major business units, its European Petrochemicals (EP) operations and its Engineering Thermoplastics (ETP) businesses in the Americas and Europe, for a combined enterprise value of US$950 million.

The EP unit has been acquired by investment group Aequita for US$500 million, while the ETP business has been sold to private equity firm Mutares for US$450 million, including an earn-out mechanism linked to future free cash flow performance.

The divestments are part of SABIC’s broader portfolio optimization program, launched in 2022 to improve efficiency, strengthen cash generation, and support greater return on capital employed (ROCE).

By offloading lower-margin assets, SABIC says it is sharpening its focus on higher-value growth markets aligned with its competitive strengths.

Khalid H. Al-Dabbagh, chairman of SABIC’s board, said the deal represents a significant milestone in the company’s transformation roadmap.

“The board endeavored to achieve these transactions, which represent a 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,” he said.

SABIC CEO Abdulrahman Al-Fageeh said the transactions allow the company to reshape its global footprint while maintaining access to critical markets.

“These transactions allow 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,” he said.

The EP business includes key petrochemical production assets across Europe, while the ETP operations consist of compounding and thermoplastics manufacturing facilities serving customers throughout North America, Latin America, and Europe.

Despite the divestments, SABIC emphasized that it will retain access to these markets through long-term agreements and continue investing in research, advanced technology, and innovation capabilities.

SABIC CFO Salah Al-Hareky said the divestments play an important role in improving overall financial performance.

“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,” he commented.

Industry analysts note that the move is consistent with a trend among global petrochemical producers seeking to rebalance portfolios amid margin pressures, overcapacity in commodity chemicals, and rising competition from lower-cost production regions.

SABIC confirmed that business continuity, customer service, safety, and compliance standards will remain unchanged during the transition.

The transactions are subject to regulatory approvals and customary closing conditions, including employee consultation processes where required.

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