$950 Million! Sabic Sells European And American Plastics Business

Sabic announced the sale of its plastics business in the Americas and Europe through two major transactions, with a total value of $950 million.

The aforementioned transaction involves the buyer Mutares SE & Co. KGaA and Aequita SE & Co. KGaA, which is highly aligned with Sabic's ongoing "Portfolio Optimization Plan," aimed at achieving sustainable growth and value creation.

Mutares SE & Co. KGaA has signed a $450 million acquisition agreement to take over Sabic's engineering thermoplastic (ETP) business in the Americas and Europe. According to Mutares, this acquisition is the largest transaction in its history and will help establish a new "Chemicals and Materials" business segment for the company.

Globally renowned product portfolio

The engineering thermoplastic (ETP) business, with an annual revenue of $2.5 billion, operates 8 production facilities and employs approximately 2,900 people. Its product portfolio includes several globally recognized brands such as Lexan (polycarbonate), Cycoloy (alloy resin), Valox (polybutylene terephthalate), and Cyclolac (acrylonitrile-butadiene-styrene copolymer).

SABIC's petrochemical business segment in Europe primarily engages in the production and sales of ethylene, propylene, low-density polyethylene (LDPE), high-density polyethylene (HDPE), polypropylene (PP), and high-value-added polymer composites.

The business holds a leading position in several core engineering thermoplastic categories, with polycarbonate (PC) production capacity ranking second globally, and it is also the only producer of polybutylene terephthalate (PBT) in the United States.

Johannes Laumann, Chief Investment Officer of Mutares, stated that the acquisition of Sabic's Engineering Thermoplastics (ETP) business is an important milestone in the company's development journey.

He pointed out: "This is not only the largest transaction we have ever undertaken, but also marks the official launch of the company's new chemical and materials business sector. The strong presence of the engineering thermoplastic (ETP) business in the Americas and European markets, along with its high-end brand matrix and leading technological accumulation, will lay a solid foundation for us to build a leading platform in the advanced materials and specialty chemicals field."

Alkenes and Polyolefins Assets

In another independent transaction, Aequita SE & Co. KGaA acquired Sabic's olefins and polyolefins assets in Europe for $500 million. The deal involves four production facilities located in the Netherlands, Germany, Belgium, and the United Kingdom, with a total of approximately 1,900 employees and annual business revenue of $3.5 billion.

According to Aequita, this acquisition is another significant move following its recent acquisition of LyondellBasell's olefins and polyolefins business. After the integration of the two businesses, it is expected to form an industry platform with annual revenue of 7 billion USD.

The above two transactions fully demonstrate Sabic's strategic determination to continuously optimize its business portfolio and focus on long-term growth.

Abdulrahman Al-Fageeh, CEO of Sabic, expressed confidence in the development prospects of the divested business under its new owner.

He emphasized, "After multiple rounds of competitive bidding, Mutares ultimately emerged as the winner and will take over the solid foundation we have built in the engineering thermoplastic (ETP) business in the Americas and Europe. We firmly believe that this transaction will safeguard the future development of this business."

Both transactions require approval from regulatory authorities and are expected to be completed by the end of 2026. Analysts point out that the timing of the deals is crucial.

Simon Kitchen, founding partner and macro strategist at Emerging Frontier Capital in London, stated in an interview with Microsoft National Broadcasting Company (MSN): "The petrochemical industry cycle is currently in a trough, with capacity continuing to expand and a significant amount of new capacity being released throughout the year. Meanwhile, regulatory pressure in Europe is notably higher than in other regions. Against this backdrop, Sabic's sale of related assets has full financial rationale."

It is worth noting that a month before the announcement of this transaction, Sabic had just announced its withdrawal from a petrochemical project in Oman, terminating plans to build a world-class petrochemical production base in Duqm.

Kichin added to the media, "Given the Saudi government's recent reaffirmation of its focus on domestic industrial development, it is reasonable for Sabic to shift its strategic focus towards the domestic market. At the same time, Sabic continues to increase its capacity expansion investments in key demand areas, specifically in East Asia. Essentially, this represents a reallocation of capital, and the motivation for asset sales is not solely limited to the current petrochemical industry cycle."