MOSCOW (MRC) -- Sabic has announced that it has purchased additional shares in Clariant, increasing its holding in the company from 24.99% to 31.5%, reported Chemweek.
The move is part of Sabic’s growth strategy to achieve a leadership position among global peers in specialties and increase this segment’s contribution to Sabic. Completion of the transaction is subject to regulatory approvals.
Sabic acquired the original stake in Clariant in 2018 and became its anchor shareholder. At that time, Clariant’s chairman Hariolf Kottmann said that Sabic pledged not to increase its shareholding to the one-third level at which Swiss law would oblige it to make a full offer for the company.
The two companies tried to link in a major, specialties joint venture (JV) by combining Clariant’s additives and high-value masterbatches with parts of Sabic’s specialties business. Clariant was expected to hold a majority stake in the combined company and make a payment to Sabic to equalize the value of their contributions to the JV, but the companies failed to agree on price. Since then, Clariant decided to divest part of the business that was to be included in the JV.
Sabic confirmed late last year that it targets a top-five global position in specialty chemicals, seeking to match its leading position in petrochemicals. Sabic’s specialties business generates annual sales of about $1.8 billion with EBITDA margins of 20%. The goal is to boost overall EBITDA into the “billions” through both organic growth and acquisition, Ernesto Occhiello, executive vice president/specialties, told CW recently.
Sabic is in the process of being acquired by Saudi Aramco. Aramco recently received unconditional approval from the European Union to proceed with the acquisition. This means that Aramco now has all the relevant antitrust approvals and hopes to close the deal in the first half of this year. Aramco is acquiring a 70% stake in Sabic from the Saudi Investment Fund for $69.1 billion. The remaining 30% of Sabic is traded on the Saudi Stock Exchange.
As MRC informed earlier, SABIC Europe, an affiliate of SABIC, conducted a maintenance work at its cracker No.3 at Geleen site in the Netherlands last autumn. The planned maintenance started in September and lasted around 2 months. The company operates two steam crackers in Geleen which are capable of producing 1,250,000 tons/year of ethylene and 675,000 tons/year of propylene in total.
Earlier last year, SABIC took off-stream its SABIC Olefins 4 cracker owing to technical issues on May 10, 2019. Further details on duration of the shutdown could not be ascertained. Located in beek, the Netherlands, the cracker has an ethylene production capacity of 690,000 mt/year and a propylene production capacity of 360,000 mt/year.
Ethylene and propylene are feedstocks for producing polyethylene (PE) and polypropylene (PP).
According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 1,904,410 tonnes in the first eleven months of 2019, up by 6% year on year. Shipments of all PE grades increased. PE shipments increased from both domestic producers and foreign suppliers. The PP consumption in the Russian market was 1,161,830 tonnes in January-November 2019, up by 7% year on year. Deliveries of all grades of propylene polymers increased, with the homopolymer PP segment accounting for the largest increase.
Saudi Basic Industries Corporation (Sabic) ranks among the world's top petrochemical companies. The company is among the world's market leaders in the production of polyethylene, polypropylene and other advanced thermoplastics, glycols, methanol and fertilizers.
Clariant AG is a Swiss chemical company and a world leader in the production of specialty chemicals for the textile, printing, mining and metallurgical industries. It is engaged in processing crude oil products in pigments, plastics and paints.
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