SABIC divests European petrochemicals and engineering thermoplastics businesses for $950 million to sharpen focus, boost returns, and support sustainable growth.
Saudi Basic Industries Corporation has announced the signing of two major strategic divestment agreements that mark an important milestone in its ongoing portfolio optimization journey. Through these transactions, SABIC will divest its European Petrochemicals (EP) business to AEQUITA and its Engineering Thermoplastics (ETP) business in the Americas and Europe to MUTARES. Together, the two transactions represent a combined enterprise value of approximately USD 950 million.
These divestments form a core pillar of SABIC’s long-term strategy to strengthen sustainable growth, enhance profitability, and improve capital efficiency. By reshaping its asset base, SABIC aims to concentrate resources on higher-margin segments and markets where it enjoys clear and durable competitive advantages. At the same time, the company intends to recycle capital into opportunities that deliver stronger returns and support improved free cash flow generation, while continuing to serve customers worldwide without disruption.
According to Khalid H. Al-Dabbagh, Chairman of the Board of Directors of SABIC, the successful execution of these transactions reflects the Board’s commitment to maximizing shareholder value. He noted that the divestments significantly enhance the company’s cash generation capacity and ensure that SABIC’s global portfolio delivers the highest possible returns over the long term.
Chief Executive Officer Abdulrahman Al-Fageeh emphasized that these deals are a continuation of SABIC’s Portfolio Optimization Program, which was initiated in 2022. Earlier steps under this program included the divestment of Functional Forms, Hadeed, and Alba. Al-Fageeh highlighted that this disciplined, proactive approach allows SABIC to continually adapt to a rapidly evolving global chemicals landscape while sharpening its focus on businesses where it can maintain sustainable leadership. He also expressed confidence that AEQUITA and MUTARES will work closely with SABIC to ensure seamless customer service during and after the transition.
From a financial perspective, Chief Financial Officer Salah Al-Hareky stated that the transactions demonstrate SABIC’s rigorous approach to capital allocation and portfolio management. By unlocking value from mature or non-core assets, SABIC can fund higher-return investments, enhance the quality of its capital employed, and progressively improve its return on capital employed (ROCE). Collectively, these actions are expected to support higher EBITDA margins, stronger free cash flow, and more resilient long-term performance.
Importantly, the divestments do not alter SABIC’s commitment to technology, innovation, and research leadership. The company will continue to maintain strategic access to European and American markets through exports, which remain priorities for its global growth ambitions. SABIC has also reaffirmed its dedication to business continuity, safety, reliability, regulatory compliance, and strong stakeholder relationships throughout the separation process.
Under the first transaction, SABIC will sell its European Petrochemicals business to AEQUITA for an enterprise value of USD 500 million. The EP business encompasses the production and marketing of ethylene, propylene, polyethylene (LDPE, LLDPE, and HDPE), polypropylene, and value-added polymer compounds. Its manufacturing footprint includes sites in Teesside (UK), Geleen (Netherlands), Gelsenkirchen (Germany), and Genk (Belgium). AEQUITA’s President and Co-CEO Axel Geuer noted that these assets are highly complementary to AEQUITA’s existing olefins and polyolefins platform, creating strong potential for operational synergies and long-term value creation.
In the second transaction, SABIC will divest its Engineering Thermoplastics business in the Americas and Europe to MUTARES for an enterprise value of USD 450 million, along with an earn-out mechanism linked to future free cash flow performance and potential resale. The ETP business produces polycarbonate, polybutylene terephthalate, and ABS resins and compounds, with manufacturing sites across the United States, Mexico, Brazil, Spain, and the Netherlands. Robin Laik, co-founder and CEO of MUTARES, underscored the strength of the workforce and customer relationships, stating that focused ownership will help unlock the business’s full standalone potential.
Both transactions remain subject to customary regulatory approvals and closing conditions, including employee consultations where applicable.
