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SABIC ACQUIRES EUROPEAN BASE
Saudi company pays almost $2 billion for DSM petrochemicals units
PATRICIA SHORT
Saudi Basic Industries Corp. (Sabic) will acquire the petrochemical operations of DSM for just over $1.8 billion. The agreement will take DSM out of a field it has been in for more than 50 years while marking Sabic's first major investment outside the Middle East.
DSM has been seeking a petrochemical buyer as it tries to reshape itself into a supplier to the life sciences industry--a goal announced at the end of 2000. And Sabic has been looking to acquire production assets in Europe; rumors have linked it to the petrochemical operations of both DSM and Italy's EniChem.
Sabic's sales in 2001 were roughly $7.8 billion, and those of DSM's largely European petrochemical unit were $2.1 billion.
The deal will move Sabic--already the largest chemical producer in the Middle East--from number 22 to number 11 in the global industry. Sabic will also become a major world player in polyethylene and polypropylene.
At a press conference called to announce the deal, Mohamed H. Al-Mady, vice chairman and managing director of Sabic, was asked why--given the current trend for European chemical companies to get out of commodities--Sabic was buying in. "We took a decision three years ago to be among the few leaders in basic petrochemicals," he said. "We excluded the strategy of going to specialties. It doesn't mean our strategy won't change in 10 years, but now we are building on our strengths."
Al-Mady was also asked about the status of the proposed EniChem venture, which was recently delayed (C&EN, April 1, page 17). He said Sabic is "still evaluating other opportunities around the world but has not come to any conclusions yet."
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