SABIC spends $2 billion
Acquistion of DSM's petrochemicals business places Saudi manufacturing giant amongst top three polyethylene companies in the world.
SABIC has agreed in principle to buy Dutch company DSM’s petrochemicals business for Eur2.250 billion (approx US $2 billion.) SABIC says that the acquisition, the largest in Saudi corporate history, will establish it as the third and fourth global player in the polyethylene and polypropylene businesses respectively.
“The acquisition of DSM’s successful petrochemical business makes sound strategic and economic sense for SABIC,” says Mohamed H. Al-Mady, vice-chairman and managing director of SABIC’s board of directors. “It will provide us with a strong entry position in the European market and a springboard for SABIC’s ambition to become a sector leader worldwide. The intended acquisition brings together experienced management teams, successful R&D divisions and a group of skilled people unrivalled in the industry. This will be good news for our customers and suppliers, and provides security and growth opportunities for petrochemical manufacturing in Europe.”
The deal is expected to close by the end of June. Half of the Eur2.25 billion will be paid by then and the other half 4.5 years after the close of the deal. The transaction requires the approval of the European Commission and may also have to be notified to competition authorities outside the European Union.
In 2001 DSM Petrochemicals generated sales of EUR 2.4 billion. About 2,300 DSM employees will be transferred to SABIC.