The Saudi Basic Industries Corporation (SABIC) has signed two strategic transactions to divest its European Petrochemicals (EP) business to AEQUITA and its Engineering Thermoplastics (ETP) business in the Americas and Europe to MUTARES, for a total combined enterprise value of $950 million.
These transactions are important milestones in SABIC’s strategy and are a key part of its ongoing portfolio optimization efforts. The divestments lay a solid foundation for future growth and strengthen the company’s long-term position, thereby maximizing value.
According to the company, these transactions reposition SABIC for longer-term success by refocusing financial resources and management attention on growth areas where the company has clear competitive advantages.
Furthermore, the divestments are expected to enhance SABIC’s performance, including by increasing overall EBITDA margins, improving free cash flow generation, and supporting higher return on capital employed (ROCE), enabling the company to optimize capital and align its profitability aspirations with a value-accretive portfolio.
Abdulrahman Al-Fageeh CEO – SABIC
“These transactions represent a continuation of our Portfolio Optimization Program, which started in 2022 and included previous actions, such as the divestment of Functional Forms, Hadeed, and Alba. 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. 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.”
SABIC’s Strategic Divestments
According to the statement, the company has agreed to sell its European Petrochemicals (EP) business to AEQUITA for a total enterprise value of $500 million.
SABIC’s EP business produces and markets various products: ethylene, propylene, low- and high-density polyethylene (LDPE, LLDPE, and HDPE), polypropylene (PP), and value-added polymer compounds, and manages several manufacturing sites, including in Teesside, the United Kingdom; Geleen, the Netherlands; Gelsenkirchen, Germany; and Genk, Belgium.
In addition, the company has agreed to sell its regional Engineering Thermoplastics (ETP) business in the Americas and Europe to MUTARES for an enterprise value of $450 million. The deal also includes an earn-out mechanism, which could provide SABIC with additional value based on the business’s free cash flow over the next four years and in the event of a future sale of the business by MUTARES.
