SABIC says exit deals build solid profit foundation

Logo of Saudi Basic Industries Corp. (SABIC)

Saudi Basic Industries Corp. (SABIC) said today, Jan. 8, that its divestments from businesses in Europe and the Americas are part of key steps to execute its strategy and core elements of its portfolio optimization program, aimed at strengthening future profitability and enhancing strategic positioning to maximize value creation.

SABIC Chairman Khalid Al-Dabbagh said the board pursued the transactions to optimize the company’s portfolio and maximize shareholder value by boosting cash generation and achieving the highest possible returns from its global operations.

CEO Abdulrahman Al-Fageeh said the two deals extend the portfolio optimization program launched in 2022, which previously included divestments from the functional forms business as well as Saudi Iron and Steel Co. (Hadeed) and Aluminium Bahrain (Alba).

He added that the strategy allows SABIC to reshape its portfolio effectively and focus on areas where it has clear and sustainable competitive advantages in a rapidly changing environment.

CFO Salah Al-Huraiki said redeploying capital toward higher-return opportunities will improve the quality and efficiency of capital use and enhance return on capital employed over time, supporting sustainable returns and shareholder value.

Earlier today, SABIC announced the sale of its 100% stake in SABIC Europe B.V., which includes its European petrochemical operations and assets, to AEQH 38 Ltd., a subsidiary of Equita SE & Co. Holding GmbH, for SAR 1.875 billion.

The company also agreed to sell 100% of its thermoplastic engineering plastics business in North America, South America and Europe to Motaris SE & Co. Holding GmbH for SAR 1.69 billion.

SABIC Executive Vice President and CFO Salah Al-Huraiki said freeing up capital to fund higher-return opportunities would improve the quality and efficiency of capital deployment and enhance the company’s return on capital employed over time, positioning it to deliver sustainable returns and shareholder value in the future.