Red Sea International, through its subsidiary Red Sea Trading Company for Building Materials and Equipment, announced the completion of the sale and transfer of its entire 81% stake in Premium Paints Company to Saudi Industrial Paints Company Limited. This move is part of the company's strategy to restructure its investments and focus on its core, higher-profitability activities.
Details of the deal and its financial impact
According to the official statement published on the Saudi Stock Exchange (Tadawul) website, the transaction was completed after obtaining all necessary regulatory approvals from the relevant authorities. The initial value of the sale of all shares of Premium Paints Company was SAR 17.3 million. Accordingly, the stake held by Red Sea Company is valued at approximately SAR 14 million, while the minority shareholder, Sherwin-Williams – Cayman Islands, retains its remaining 19% stake, valued at approximately SAR 3.28 million.
The company clarified that the financial impact of this transaction is expected to be positively reflected in its consolidated financial statements for 2026. It noted that the final transaction value will be subject to adjustment based on the final accounts to be approved before the end of the first quarter of 2026, in accordance with the mechanism agreed upon by both parties.
Strategic context and importance of the step
This transaction is part of a broader strategic direction for Red Sea International aimed at improving capital efficiency and enhancing liquidity levels. By divesting non-core investments, the company seeks to direct its financial and human resources towards its core sectors, which include the construction and manufacturing of prefabricated housing units and integrated housing solutions, sectors experiencing increasing growth in light of the mega-projects launched by Saudi Arabia under Vision 2030.
The building materials and paints sector in Saudi Arabia is experiencing intense competition and significant activity, driven by the urban development boom and mega-projects such as NEOM, the Red Sea Project, and Qiddiya. In this context, mergers and acquisitions are an effective tool for companies to strengthen their market position or, as in the case of Red Sea Global, to divest assets that are less aligned with their future vision.
Expected impact on the market
Domestically, this transaction is expected to strengthen Red Sea International's financial position, giving it greater flexibility to invest in new growth opportunities and expand its operations in its core areas. For Saudi Industrial Paints Company, this acquisition represents an opportunity to expand its market share and enhance its production capabilities, potentially leading to increased competitiveness in the paints sector. This move reflects the dynamism of the Kingdom's business environment and the ability of companies to adapt to market changes by restructuring their investment portfolios to maximize shareholder value.
