EC approves SABIC acquisition of DSM Petrochemicals
The European Commission has approved the takeover of Holland’s DSM petrochemical activities by an affiliate of Saudi Arabian Basic Industries Corporation (SABIC). The transfer of the businesses involved is expected to take place by the end of June.
The transaction involves the transfer of all shares of the companies that together form DSM Petrochemicals (DPC), the associated DPC subsidiaries, participations and sales activities, and the related technology positions, patents and trade names.
The transaction will take retroactive effect from January 1, 2002. The total consideration of the transaction before closing is €2.250 billion. In total about 2,300 DSM employees will be transferred to SABIC.
This acquisition will move SABIC from 22nd position to 11th position in the global petrochemical industry, and to third and fourth in world polyethylene and polypropylene businesses respectively.
DSM is active worldwide in life science products, performance materials and industrial chemicals. The group has annual sales of eight billion euros and employs about 22,000 people at more than 100 sites worldwide.
The company's Vision 2005 strategy is aimed at generating sales of approximately €10 billion in 2005. At least 80 percent of these sales should be generated by specialties such as advanced chemical and biotechnological products for the life science industry and performance materials.
DSM will use the revenues from the sale of its petrochemicals business to make acquisitions in specialist chemicals. The Middle East's largest petrochemicals company SABIC is based in Riyadh, Saudi Arabia. It was founded in 1976, when the Saudi Arabian government decided to use the hydrocarbon gases released in the production of oil as raw materials for the production of chemicals and polymers.
The Saudi Arabian government owns 70 percent of the SABIC shares. The remaining 30 percent are held by private investors in Saudi Arabia and other countries of the Gulf Cooperation Council (GCC).
SABIC's business activities have been organized into Strategic Business Units (SBU), which have been clustered in five Industry Groups: Basic Chemicals, Polymers, Intermediates, Fertilizers and Metals. SABIC has two large industrial sites in Saudi Arabia—Al-Jubail and Yanbu—with sixteen production complexes.
Some of these production complexes are operated with multi-national partners, such as Exxon Mobil, Shell, Fortum, Ecofuel/ENI and Mitsubishi Chemicals. In addition, SABIC has interests in three production complexes in Bahrain.
In 2001 SABIC's overall production capacity amounted to 35 million mtpa. SABIC employs about 14,500 people worldwide, most of whom are based in Saudi Arabia. In 2001 SABIC posted sales of approximately 29 billion Saudi riyals (€8.9 billion) and a net profit of SR1.8 billion (€550 million). — (menareport.com)
© 2002 Mena Report (www.menareport.com)