Saudi Arabian multinational chemical manufacturing company Saudi Basic Industries Corp (SABIC) will sell its agri-nutrients business to Saudi Arabia Fertilizers Co (SAFCO), a firm in which SABIC holds a 43 percent stake.
SAFCO, the first petrochemical company in Saudi Arabia, will issue 59.4 million shares valued at $2.67 each to SABIC to complete the transaction. The move will raise the fertilizer group’s overall share capital by 14.25% to $1.27 billion.
Speaking about the transaction at a virtual press conference, Yousef al-Benyan, CEO of SABIC stated that “The deal is a clear strategic attempt to create a national champion and a global leader in agri-nutrients.”
SABIC which has been exploring options to consolidate its various holdings in companies specializing in agri-nutrient, or fertilizer, production has signed a preliminary deal with SAFCO to divest the resulting combined business in Nov. 2018.
The newly acquired entity will be called SABIC Agri-nutrient Investments once the transfer of ownership is complete.
The transaction will allow SABIC to focus on its expansion in petrochemical products while SAFCO becomes more specialized in fertilizers and phosphate.
“The new company will become the investment arm for SABIC on agribusiness and will create more synergies on assets,” SABIC CEO Mr. Benyan stated.
Saudi Basic Industries Corp (SABIC)
The world’s fourth-largest chemicals company, SABIC is currently owned by the largest crude oil exports in the world, Saudi Aramco after the oil giant completed its acquisition of a 70 percent stake in the firm in June 2020.
SABIC is active in petrochemicals, chemicals, industrial polymers, fertilizers, and metals.