(Bloomberg) — Saudi Arabia’s sovereign wealth fund will acquire chemical maker Saudi Basic Industries Corporation for an enterprise value of 12.5 billion riyals ($3.3 billion), creating a new national metals giant.
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Public Investment Fund, as the chemical facility is known, will acquire the Saudi Iron and Steel Company from SABIC. In a separate deal, SABIC’s steel division Hadid will acquire Alrajhi Steel Industries Corporation in exchange for shares, according to a statement. The agreement was signed in It is expected to close before the end of the first quarter of 2024 and the final sale price will be finalized only after that.
SABIC shares rose 1.92 percent to 90.1 riyals a share before the acquisition.
The deal is the latest sign of Saudi Arabia’s sovereign wealth fund’s influence over the Arab world’s largest economy. The PIF is responsible for many of the country’s projects aimed at helping to wean itself off dependence on oil sales, including an auto-manufacturing hub, tourism projects and the construction of sprawling new cities.
Yazid Al-Humid, PIF’s Deputy Governor and Head of the Middle East, said: “These transactions bring PIF’s financial capabilities and industry experience together with Hadid and Rajhi Steel’s leading technical and commercial expertise. And North African investments.
PIF, led by the kingdom’s ruler Prince Mohammed bin Salman, previously owned 70% of Sabic before agreeing to sell it to state-controlled oil producer Saudi Aramco in 2019. for acquiring a $2.6 billion stake in Vale SA’s base metals division.
The world’s most valuable chemical plant, Sabic, said the sale of Hyde would allow it to focus on its core business of petrochemicals. The chemical maker has been hit by a weakening global economy, reporting an 85% drop in profits in the second quarter.
Read more: World’s top chemical company sees profit in slow economy (1)
Hadid will produce 5.2 million tons of steel by 2022, according to SABIC’s annual report. Rajhi Steel is closely owned by Mohammad Abdulaziz Alrajhi & Sons Investment Company and produces more than 2 million tonnes of steel, according to its website.
(Adds Rajhi iron production in last paragraph.)
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