The Saudi Basic Industries Corporation (SABIC) has announced agreements to divest its European Petrochemicals (EP) business to AEQUITA and its Engineering Thermoplastics (ETP) business in the Americas and Europe to MUTARES. The combined enterprise value of these transactions is $950 million.
According to SABIC, these moves are part of a broader strategy to optimize its portfolio for long-term growth. The company aims to focus on high-margin markets and products where it holds a competitive advantage, while reallocating capital toward higher-return opportunities. SABIC stated that these divestments will not affect its commitment to technology and innovation for customers.
Khalid H. Al-Dabbagh, Chairman of the Board of Directors at SABIC, said: “The Board endeavored to achieve these transactions, which represent a significant milestone in the execution of our strategy to further optimize our portfolio and maximize shareholder value by enhancing the Company’s cash generation capacity and achieving the highest possible return on our global businesses”.
Abdulrahman Al-Fageeh, Chief Executive Officer of SABIC, commented: “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”.
Al-Fageeh added: “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”.
Salah Al-Hareky, Chief Financial Officer at SABIC, stated: “These transactions are a clear demonstration of our disciplined approach and decisive execution regarding capital allocation and active portfolio management. By unlocking value to fund higher-return opportunities, we are improving the quality and efficiency of our capital employed and enhancing the group’s ROCE over time. Together, these actions position SABIC to deliver sustainable returns and create value for our shareholders.”
The sale of the EP business involves an enterprise value of $500 million. This segment produces ethylene, propylene, various polyethylene types (LDPE, LLDPE, HDPE), polypropylene (PP), polymer compounds, and operates manufacturing sites across several European countries including the United Kingdom, Netherlands, Germany, and Belgium.
Dr.-Ing. Axel Geuer, President & Co-CEO of AEQUITA said: “This transaction represents a further step in the expansion of our European chemicals platform. The assets are highly synergistic with the olefins and polyolefins business we recently acquired from LYB; with complementary markets, infrastructure and operational capabilities, we see substantial potential to realize synergies and drive operational improvements across both businesses. Under AEQUITA’s active ownership model, our focus will be on supporting the teams on the ground, ensuring a seamless integration, and building a scaled, competitive platform positioned for long-term, sustainable value creation.”
For its ETP business in Europe and the Americas—valued at $450 million—SABIC agreed an earn-out mechanism based on future free cash flow generation or any subsequent sale by MUTARES. The ETP division manufactures polycarbonate (PC), polybutylene terephthalate (PBT), acrylonitrile butadiene styrene (ABS) resin/compounds with sites in multiple locations across North America as well as Spain and Netherlands.
Robin Laik, co-Founder & CEO of MUTARES said: “The Engineering Thermoplastics (ETP) business in the Americas and Europe has a highly skilled workforce and strong customer relationships. Under focused ownership, our priority is to ensure continuity, support employees through the transition, and unlock the full potential of our asset base as a standalone ETP platform.”
SABIC noted that it would maintain access for its products via exports into Europe/Americas post-divestment while continuing research activities globally.
Completion remains subject to regulatory approvals including employee consultation processes where required.
Advisors involved include Goldman Sachs for financial advice on EP transaction; J.P. Morgan for ETP; Lazard as independent advisor; KPMG for accounting/tax matters; A&O Shearman provided legal counsel.
