In a strategic move aimed at reshaping its investment portfolio, Saudi Basic Industries Corporation (SABIC) announced the signing of a binding agreement with Equita SE & Partners Limited (Equita) to sell its entire stake in SABIC Europe B.V. This transaction, valued at SAR 1.87 billion, represents a significant turning point in the Saudi petrochemical giant's presence in Europe.
Details of the transaction and the assets sold
According to a statement published on the Saudi Stock Exchange (Tadawul) website, the transaction was finalized on January 7th and involves the complete divestment of 100% of SABIC Europe B.V. The assets sold include a portfolio of vital industrial facilities and petrochemical plants located in several European countries, namely:
- Teesside facilities in the United Kingdom.
- Gillen facilities in the Netherlands.
- Gelsenkirchen facilities in Germany.
- Genk facilities in Belgium.
The deal also includes the transfer of the commercial activities and associated infrastructure of these facilities to Munich-based Equita. The transaction will be settled through two perpetual bonds, repayable based on the projected future cash flows of the new entity.
Strategic context: Why is SABIC selling its European assets?
This move comes within a broader context for the global petrochemicals sector, where major companies are seeking to improve capital efficiency amidst evolving market challenges. This transaction is part of SABIC's strategic initiative to streamline its business portfolio, with the company aiming to:
- Focus on high-growth markets: Redirecting resources towards markets with increasing demand and higher returns.
- Improving the cost structure: Disposing of assets that may suffer from high operating costs, especially in light of fluctuating energy prices in Europe.
- Maximizing shareholder value: by improving free cash flow and increasing the return on capital used over the long term.
Expected financial and accounting impact
Financially, SABIC disclosed detailed information regarding the impact of the transaction on its financial statements. The book value of the assets involved is approximately SAR 12.49 billion (as of September 30, 2025). Based on the fair value and net assets to be transferred, the company expects to record a non-cash loss of approximately SAR 10.8 billion in its Q4 2025 results.
SABIC Europe B.V. will be treated as discontinued operations in accordance with International Financial Reporting Standard 5, meaning that these assets and operations will be separated from the company’s consolidated financial statements once the transaction is closed.
Timeline and completion requirements
SABIC expects the transaction to be finalized in the fourth quarter of 2026, subject to fulfilling a number of complex preconditions, including:
- Obtaining the necessary regulatory approvals from the competent authorities in the countries concerned.
- Completion of consultations with representatives of employees and European trade unions.
- The technical and operational separation of SABIC Europe from the parent group.
- Completion of specific capital projects that were agreed upon in advance.
This transaction confirms SABIC’s commitment to the flexibility of its strategy and its ability to make bold decisions that serve the interests of its shareholders and enhance its strong financial position to meet future challenges and invest in sustainable growth opportunities.
