SABIC moves to exit European and Western plastics assets

Saudi Basic Industries Corporation has agreed to divest its European petrochemicals arm and its engineering thermoplastics operations across the Americas and Europe, marking a significant portfolio shift by the chemical producer as it sharpens its focus on core businesses.

The company said it has signed a definitive agreement with Germany’s AEQUITA SE & Co. KGaA to sell 100 per cent of its shares in SABIC Europe BV for an enterprise value of 1.88 billion Saudi riyals, equivalent to about $501 million. The transaction covers SABIC’s European petrochemicals business and related assets, including production facilities in the United Kingdom and the Netherlands.

SABIC, which is 70 per cent owned by Saudi Aramco, confirmed that the disposal forms part of a broader set of agreements to exit non-core operations. Alongside the European transaction, the group has also signed agreements to divest its Engineering Thermoplastics business in the Americas and Europe, further reducing its exposure to downstream plastics segments outside its main growth priorities.

The European unit being sold includes a portfolio of manufacturing plants, logistics infrastructure and commercial operations supplying basic petrochemicals to industrial customers across the region. Facilities in the UK and the Netherlands have historically served as hubs for producing and distributing products such as olefins and polyolefins, feeding into sectors ranging from packaging to automotive components.

AEQUITA, a Munich-based industrial group specialising in the acquisition and development of corporate carve-outs, said the purchase aligns with its strategy of investing in established industrial platforms and strengthening their long-term competitiveness. The firm has a track record of acquiring assets from large multinationals and operating them as independent businesses with a focus on operational efficiency and regional market positioning.

For SABIC, the divestment underscores a deliberate recalibration of its global footprint. The company has been reviewing its asset base since becoming a subsidiary of Saudi Aramco, with management signalling a desire to concentrate capital on areas that offer scale advantages, technology leadership and closer integration with Aramco’s upstream and refining operations.

The sale price for SABIC Europe BV reflects challenging conditions in the European chemicals sector, where producers have faced sustained pressure from high energy costs, weaker industrial demand and intensifying competition from lower-cost regions. Analysts have noted that margins in European petrochemicals have remained under strain, prompting several global players to rationalise capacity or exit selected markets.

By transferring ownership of the European assets to a specialised industrial investor, SABIC reduces its operational exposure while allowing the business to continue under an owner focused on regional optimisation. The transaction is subject to customary regulatory approvals and closing conditions, including competition clearances in relevant jurisdictions.

The parallel decision to divest the Engineering Thermoplastics business in the Americas and Europe highlights a similar strategic logic. The ETP segment produces high-performance plastic materials used in applications such as automotive parts, electrical components and consumer goods. While technologically sophisticated, the business operates in competitive markets that require sustained investment to maintain differentiation.

SABIC has not disclosed the financial terms of the ETP divestments, but the move signals a willingness to streamline its portfolio even in segments where it has longstanding technical capabilities. Industry observers see the step as consistent with a broader trend among diversified chemical groups to simplify structures and allocate resources to businesses with clearer growth trajectories.

Saudi Aramco’s majority ownership has reshaped SABIC’s strategic priorities since the energy giant completed its acquisition of the stake in 2020. The integration has opened avenues for closer alignment between petrochemicals production and hydrocarbon feedstock supply, particularly in the Middle East and Asia, where demand growth prospects are viewed as stronger than in mature Western markets.

Within this context, SABIC reshapes portfolio with Europe exit deal as management seeks to balance financial discipline with long-term positioning. Proceeds from the divestments are expected to support balance-sheet strength and provide flexibility for investment in advanced materials, circular economy initiatives and projects linked to energy transition themes.