SABIC Reshapes Global Portfolio: Dual Exit from Europe and Engineering Plastics Exceeds SAR 3.5 Billion

Riyadh – January 8, 2026

SABIC (Saudi Basic Industries Corporation) has executed two consecutive strategic steps under its global portfolio restructuring program by signing separate agreements for a complete exit from selected European operations and its thermoplastic engineering plastics business in Western markets. The total value of these transactions exceeds SAR 3.56 billion, with additional conditional future proceeds.

Deal 1: Exit from Thermoplastic Engineering Plastics

SABIC signed an agreement with Motars SE & Partners Ltd (Germany) to sell 100% of its thermoplastic engineering plastics business in North America, South America, and Europe.

• Total value: SAR 1,687.5 million
• Financial structure:
  • Upfront cash payment: SAR 210 million
  • Future returns mechanism:
    • 30% of operating cash flows for four years
    • 30% of net exit proceeds (if any)
  • Minimum guaranteed future return: SAR 262.5 million
• Signing date: January 7, 2026
• Expected completion: Q3 2026 (pending approvals)

Deal 2: Sale of All European Petrochemical Operations

Simultaneously, SABIC signed an agreement with Equita SE & Partners Ltd to acquire 100% of the shares in SABIC Europe BV, which includes the company’s petrochemical assets in Europe.

• Total value: SAR 1,875 million
• Payment mechanism: Perpetual debt instruments to be repaid from the future cash flows of the combined businesses
• Assets included: Production facilities in the UK, Netherlands, Germany, and Belgium
• Signing date: January 7, 2026
• Expected completion: Q4 2026

SABIC stated that this deal will be classified as discontinued operations under IFRS 5, with an estimated non-cash loss of SAR 10.8 billion to be recorded in Q4 2025 results, based on fair value asset reassessment.

In-Depth Analysis: Why Exit Now, and in This Manner?

1️⃣ Europe No Longer a Strategic Profit Center

The European petrochemical industry faces:

• Chronic high energy costs
• Stringent regulatory and environmental regimes
• Lower competitiveness compared to the US and Middle East

This has led to a below-group-average return on capital employed for these assets.

2️⃣ Shifting from “Scale” to “Value”

SABIC is clearly moving from:

Wide-scale geographic expansion
to
Maximizing cash returns and financial flexibility

This is evident in:

• Linking part of the proceeds to future cash flows
• Ensuring minimum guaranteed returns
• Reducing long-term operational risks

3️⃣ Smart Exit Management vs. Traditional Sale

The deals are not mere “direct sales”; instead, they represent:

• Strategic dismantling of low-efficiency assets
• Retaining a share of future value through return mechanisms

4️⃣ Preparing the Balance Sheet for Post-2026

The exits will:

• Improve free cash flow
• Recycle capital into:
  • Higher-growth markets
  • Specialty chemicals
  • Advanced materials with higher margins

5️⃣ Market Timing: Exiting Before a Downturn

The decision comes:

• Before a potential deepening of the European downturn cycle
• And ahead of further pressures on industrial asset valuations

Stock Performance (as of now)

• Price: SAR 49.48
• Change: -SAR 1.17 (-2.31%)
• Traded value: SAR 81.9 million
• Volume traded: 1.67 million shares

The decline reflects the short-term market sensitivity to the non-cash accounting loss, while the long-term strategic impact has yet to be fully recognized.

Conclusion

SABIC is not withdrawing, but repositioning.
This is not a business downsizing, but a comprehensive engineering of its global portfolio in preparation for a new growth cycle that is more focused, profitable, and less capital-intensive.