Riyadh – Mubasher: Saudi Basic Industries Corporation (SABIC) announced plans to sell the entire shares of its wholly-owned subsidiary Saudi Iron and Steel Company (Hadeed) to the Public Investment Fund (PIF).
The enterprise value of the transaction amounts to SAR 12.50 billion, while the asset book value stands at SAR 10.65 billion as of 30 June 2023, according to a bourse filing.
Hadeed will fully acquire Al Rajhi Steel Industries Company from Mohammed Abdulaziz AlRajhi and Sons Investment Company (Rajhi Invest) in exchange for newly issued shares in SABIC’s unit.
Meanwhile, the agreements are subject to certain regulatory approvals from the relevant authorities.
The transactions align with PIF’s efforts to bolster Saudi Arabia’s industrial development in order to meet the increasing local demand for steel and enhance the Kingdom’s steel production capabilities.
In line with Saudi Vision 2030, the transactions will contribute to driving the growth of key downstream sectors, such as local construction, automotive, utilities, renewables, transport, and logistics.
Yazeed Al Humied, Head of MENA Investments at PIF, highlighted: “These transactions will bring together PIF’s financial capabilities and industry experience with Hadeed and Rajhi Steel’s leading technical and commercial expertise, to create a national champion in Saudi Arabia’s steel sector.”
“They also build on PIF’s mandate to establish new strategic partnerships in order to enable the private sector,” Al Humied continued.
Abdulrahman Al Fageeh, CEO of SABIC, commented: “The sale of Hadeed will enable SABIC to focus meanwhile on its strategy to become the preferred world leader in chemicals.”
Yazid Mohamed Al Rajhi, Chairman of Rajhi Invest, said: “We are excited to bring together our capacity and expertise, alongside that of PIF and Hadeed, to enable Hadeed to better meet the future demands of its customers.’’
Last July, SABIC joined forces with Saudi Arabian Oil Company (Aramco) and French petroleum firm TotalEnergies to develop pyrolysis oil for the first time in the MENA region.
