SABIC sells European, Americas assets to German firms

Global plastics producer SABIC (Saudi Basic Industries Corp.) has entered into agreements to sell its petrochemical and engineering thermoplastics (ETP) businesses in Europe and the Americas to a pair of Germany-based investment firms for a combined value of $950 million.

Saudi Arabia-based SABIC is selling its petrochemical assets in Europe to Aequita SE & Co. KGaA for $500 million. According to Aequita, the transaction includes four production sites in the Netherlands, Germany, Belgium and the United Kingdom. Together, the sites employ about 1,900 people and generate $3.5 billion in revenues, producing olefins and polyolefins such as ethylene, propylene, high- and low-density polyethylene (HDPE, LDPE), polypropylene (PP) and value-added polymer compounds.

Additionally, SABIC has agreed to sell its ETP business in Europe and the Americas to Mutares SE & Co. KGaA for an enterprise value of $450 million. The transaction is expected to close in the second half of this year, subject to customary approvals.

SABIC says the divestments are a continuation of its plans to improve returns; focus on high-margin markets and products where it feels it has a clear competitive advantage; recycle capital to higher-return opportunities; and improve free cash flow while serving its customers and maximizing shareholder value. The company adds that the transactions do not impact the technology and innovation focus and commitment it has for its customers.

Regarding the petrochemicals purchase, Aequita says the business “represents a scalable, integrated platform with resilient market positions, advantaged infrastructure and established customer relationships.”

The firm also recently acquired olefins and polyolefins businesses from LyondellBasell and says its two purchases support “much-needed consolidation” of the European olefins and polyolefins sector.

“It will create a platform with a comprehensive product portfolio, expand cross-selling opportunities and deliver meaningful cost and operational optimization synergies,” Aequita says. “Combined, the two businesses are expected to generate $7 billion in revenues.”

Mutares says the planned acquisition of SABIC’s ETP business represents the largest transaction in its history and marks the creation of a new strategic segment, “Chemicals & Materials.” The Munich-based firm says that upon the closing of the transaction, the new Chemicals & Materials segment will comprise the ETP business as its core platform and also will include Venator Ultramarine Blue Pigments.

Mutares says the ETP business has a resin production capacity of approximately 1,085 kilotons and a compounding capacity of about 780 kilotons and operates a “broad international platform” with about 2,900 full-time employees and eight production facilities across the Americas and Europe. The unit’s product range includes polycarbonates (PC), polybutylene terephthalate (PBT) and acrylonitrile butadiene styrene (ABS) resin and compounding lines, supported by global brands such as Lexan, Cycoloy, Valox and Cycolac.

Mutares says the ETP business is generating approximately $2.5 billion in revenues and is the world’s second-largest producer of PC, the leading ABS producer in the United States and also the nation’s sole producer of PBT. It serves a customer base that includes companies in the automotive (39 percent), building and construction (20 percent), consumer products (17 percent), electrical and electronics (10 percent) and healthcare (3 percent) industries, with additional exposure to water containers and other industrial applications.

Mutares says the acquisition will allow it to leverage the ETP business’ upstream-integrated platform, broad technical capabilities and strong innovation pipeline to accelerate growth, operational excellence and value creation across the newly established Chemicals & Materials segment.

Johannes Laumann, chief information officer of Mutares, says the acquisition is a milestone in its corporate development.

“It is not only the largest transaction in our history, but it also marks the launch of our new Chemicals & Materials segment,” Laumann says. “The ETP business’ footprint in the Americas and Europe, premium brands and technological depth provide an exceptional foundation for building a leading platform in advanced materials and specialty chemicals.”

According to SABIC CEO Abdulrahman Al-Fageeh, both transactions represent a continuation of the company’s portfolio optimization program, which began in 2022 and included other actions.

“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,” Al-Fageeh says. “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.”