Saudi Basic Industries Corp announced it had agreed to sell its subsidiary Saudi Iron and Steel Company (Hadeed) to the Public Investment Fund (PIF) for an enterprise value of US$3.33 billion.
Hadeed has been a key player in the construction sector in Saudi Arabia and a key contractor for large infrastructure projects.
It is noted that PIF, the Kingdom’s Wealth Fund, is pursuing the kingdom’s Vision 2030 of a more diversified economy.
The transaction is to close by the end of the first quarter of 2024.
The results from the sale will be used to boost SABIC’s growth in the chemicals industry, according to a company statement to the stock exchange.
The final sale price will be announced closer to the finalization date.
SABIC has reported a huge decrease in its second-quarter net profit on lower average sales prices and weaker demand.
The company also mentioned that the fair valuation of Hadeed’s net assets is expected to result in a non-cash loss of between 2 to 2.5 billion riyals in third-quarter earnings. The PIF had sold its 10. 9 percent stake in National Gas and Industrialization Company through a private share sale for $130.96 million.
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