Riyadh – Mubasher: The Saudi Basic Industries Corporation (SABIC) on Tuesday announced signing a nine-month memorandum of understanding (MoU) with Clariant AG to launch new sector to produce high-performance materials.
The new sector "will be an exceptional source of global growth in the specialties business" for the two companies, SABIC said in a statement to the Saudi Stock Exchange (Tadawul).
In case of the two firms approved the key principles of the MoU, SABIC will merge some of its products with some of Clariant’s, the Saudi petrochemical giant said, noting that it was considering merging ULTEM, NORYL resins, LNP compounds, and copolymers with Switzerland-based Clariant additives and high-value masterbatch offerings.
“Following [the] completion of the intended transaction, Clariant would form a new high-performance materials business incorporating the combined products of both companies to achieve the competitive advantage of that business. In addition to realising cost synergies and operating efficiencies,” the statement added.
This transaction is considered part of SABIC’s efforts to expand both locally and globally. It is also part of its scheme to diversify its products.
The deal, signed late Monday, will end in June 2019.
Earlier on Tuesday, the Saudi firm announced signing a governance agreement with Clariant. A week earlier, SABIC announced obtaining regulatory approvals to buy a 24.99% stake in Clariant AG.
By 10:56 Saudi time, SABIC’s stock rose 1.20%, reaching SAR 118.20.
