Saudi’s SABIC eyes acquisitions worth up to $6bn

Saudi Basic Industries Corporation (SABIC) is evaluating acquisition opportunities in the range of $3bn to $6bn in petrochemicals, speciality chemicals and fertilisers, its chief executive said on Tuesday.

Yousef Abdullah al-Benyan told Reuters that SABIC, which is majority state owned, aims to do the first such deal in the fourth quarter of this year.

In petrochemicals it is targeting acquisitions in North America and China, and it is also exploring targets in Africa for fertilisers or agricultural nutrients.

SABIC is currently the world’s fourth-biggest petrochemicals company, but says acquisitions could push it into the top three behind Dow Chemical Co and BASF.

“There are some opportunities, they are in the range of $3-$6bn,” Benyan said in an interview on the sidelines of a conference in Riyadh. “This is basically the starting point.”

Benyan spoke to Reuters a day after the company reported an 80 per cent jump in first quarter net profit.

He said SABIC was very positive regarding economic growth in key markets the United States and China, and was putting more focus on Africa and on emerging markets generally in the longer term.

“Overall, with what’s happening in China right now … I think we are very positive on 2017, but our view is that the healthy recovery (in key markets) is going to be by end-2019 and beyond.”

Benyan said SABIC and Saudi Aramco were looking at finalising technology solutions and will reach “a very important milestone” within a few weeks with regards to their joint oil-to-chemicals (OTC) project, announced last June.

“The OTC is one of the largest growth (projects), we are going to produce probably more than 18 million tones of materials yearly,” he said.