SABIC to Sell European Petrochemicals and Western Thermoplastics Units for $950 Million

Saudi Basic Industries Corporation has agreed to divest two major downstream businesses in Europe and the Americas in transactions valued at a combined $950 million, sharpening its focus on higher-margin growth segments and freeing up capital for reinvestment, according to company reporting.

The deals mark one of SABIC’s most significant portfolio shifts in recent years, as global chemical producers face weaker demand in commodity plastics, higher energy costs in Europe, and increasing pressure to improve capital efficiency. Analysts say the moves underscore a broader industry trend toward streamlining asset bases and prioritizing returns over scale.

SABIC said it will sell its European petrochemicals operations to Germany-based investment firm AEQUITA for an enterprise value of $500 million, while its engineering thermoplastics business across Europe and the Americas will be transferred to turnaround specialist MUTARES for $450 million, excluding a performance-linked earn-out. Both transactions are subject to regulatory approvals and employee consultation processes.

The divestments build on SABIC’s portfolio optimization program launched in 2022, which has already seen the sale of assets such as Hadeed, Alba, and the Functional Forms business. Company disclosures show the strategy is aimed at lifting free cash flow, improving return on capital employed, and reallocating resources toward specialties, advanced materials, and technology-driven products where SABIC believes it has a durable advantage.

Observers note that Europe has become a particularly challenging region for petrochemical producers, with persistently high energy prices and stricter environmental regulations compressing margins. Industry data published by the European Chemical Industry Council show capacity utilization in several base polymer segments remains below historical averages, prompting multinational groups to reassess asset footprints.

Under the agreement with AEQUITA, SABIC will exit a European petrochemicals platform that includes crackers and polyolefins production at sites in the United Kingdom, the Netherlands, Germany, and Belgium. The business supplies ethylene, propylene, polyethylene, polypropylene, and related compounds to packaging, construction, and industrial markets. AEQUITA said the assets complement olefins and polyolefins operations it acquired previously, creating scope for cost synergies and operational improvements.

The second transaction transfers SABIC’s engineering thermoplastics activities in North America, Latin America, and Europe to MUTARES. The unit manufactures polycarbonate, PBT, and ABS resins and compounds, materials widely used in automotive, electronics, and consumer applications. The deal includes an earn-out mechanism tied to future cash generation and a potential resale, a structure analysts say allows SABIC to retain upside while reducing near-term exposure.

SABIC executives said the company will maintain supply relationships with both businesses after closing, preserving access to European and American markets through exports and long-term commercial arrangements. The group also stressed that its global research and innovation capabilities remain intact, with no change to its broader technology roadmap.

Industry groups argue that such carve-outs can help large producers become more resilient during cyclical downturns, while providing incoming owners with platforms to pursue operational turnarounds or consolidation. AEQUITA and MUTARES both emphasized continuity for customers and employees, signaling a focus on stabilization rather than rapid restructuring.

Analysts expect SABIC to continue evaluating non-core assets as it aligns its portfolio with long-term demand for advanced materials, circular solutions, and lower-carbon products. 

Source: SABIC

SUNSHINE Spotlight: By selling two capital-intensive downstream units, SABIC is repositioning its portfolio to prioritize cash flow, returns, and strategic focus in a more volatile global chemicals market.