Saudi Arabia: SABIC to Sell Hadeed Steel Unit to PIF for $3.3 Billion

For an enterprise value of 12.5 billion Saudi riyals ($3.33 billion), the Public Investment Fund (PIF) will acquire Saudi Iron and Steel Company (Hadeed) from Saudi Basic Industries Corp (SABIC). This transaction is expected to be finished by the end of the first quarter of 2024.

SABIC to Sell Subsidiary Hadeed to PIF for $3.33 Billion

The Open Speculation Finance (PIF) will buy Saudi Press and Steel Company (Hadeed) from Saudi Fundamental Businesses Corp (SABIC) for an endeavor esteem of 12.5 billion riyals ($3.33 billion). The extreme deal cost will be made open closer to the completion date, and the bargain is expected to happen by the conclusion of the primary quarter of 2024.

SABIC, one of the world's largest petrochemical companies, has faced challenges with lower average sales prices and weaker demand, leading to a significant decline in its second-quarter net profit. The divestment of Hadeed is in line with SABIC's strategy to focus on its core businesses.

The fair valuation of Hadeed's net assets is projected to lead to a non-cash loss ranging from 2 to 2.5 billion riyals in SABIC's third-quarter earnings. This non-cash loss reflects the difference between the valuation of Hadeed's assets and their book value. While this accounting adjustment will impact SABIC's financials, the divestment of Hadeed is seen as a strategic move aligned with SABIC's focus on core businesses. The sale of Hadeed to the Public Investment Fund (PIF) for $3.33 billion will support SABIC's growth in the chemicals industry.

Major steel producer Hadeed has been crucial to Saudi Arabia's infrastructure projects, supporting the PIF-led Vision 2030 strategy for the country's economic transformation.

The Public Investment Fund (PIF)

The Public Investment Fund (PIF) has executed a sale of its 10.9% stake in the National Gas and Industrialization Company. This transaction, conducted through a private share sale, amounted to 491.2 million riyals ($130.96 million). The buyer, Jadwa Investment Company, is set to complete the transaction by September 5th. This move reflects PIF's strategic decisions regarding its investment portfolio and asset management.

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