SABIC sells Hadeed to PIF for SAR 12.5 bln

Logo of Saudi Basic Industries Corp. (SABIC)

Saudi Basic Industries Corp. (SABIC) signed today, Sept. 3, an agreement with the Public Investment Fund (PIF) to sell 100% shareholding in the Saudi Iron & Steel Co. (Hadeed) for SAR 12.5 billion.

In a statement to Tadawul, SABIC said the final sale price will be determined on the deal closure date, which is anticipated to be before the end of Q1 2024, since the transaction is made by using the Completion Accounts Mechanism.

The completion of the transaction is conditional to obtaining approvals from the relevant authorities and satisfaction of certain conditions in the transaction documents.

The asset’s book value stood at SAR 10.65 billion as of June 30, 2023, the statement noted, adding that the transaction will enable SABIC to optimize its portfolio and focus on its core business.

Hadeed is engaged in manufacturing of steel products, including reinforcing bar (rebar), coiled wire, billets, slabs, sections, hot and cold rolled coil, galvanized coil, preprinted coil and hot film laminated coil.

The proceeds will be used to reinforce SABIC’s growth in the chemicals industry and there are no related parties to the transaction, the statement added.

SABIC expected to incur non-cash losses between SAR 2 billion and SAR 2.5 billion. The negative financial impact is likely to appear in Q3 2023. 

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