Saudi Riyadh-Saudi Basic Industries Corporation (SABIC), the world's third largest diversified chemical company, recently announced that it is taking relevant measures to independently operate part of the special materials department's business. The strategic purpose of this initiative is to lay a solid foundation for the future of organic and inorganic growth of specialty materials business, including a business transaction currently being negotiated with Clariant. The two companies have recently signed a memorandum of understanding on this business cooperation. This memorandum will help Clariant create a new "high-performance materials" specialty chemicals business, making it a highly advantageous global growth platform.
The process of independent operation of SABIC special materials business is expected to be completed by the end of 2019. At that time, if the cooperation with Clariant proceeds as scheduled, some of SABIC's specialty materials businesses—the unique ULTEM ™ and NORYL ™ brand resin products and the LNP ™ compound and copolymer product family will cooperate with Clariant ’s additives and high value. The masterbatch business is integrated and becomes part of the Clariant Group business. In the future, Clariant, headquartered in Switzerland and listed on the Swiss Stock Exchange, will become a strong and highly competitive supplier dedicated to creating high-performance material products and solutions tailored for customers in the specialty chemical industry.
"The SABIC Special Materials Department's independent operation and the signing of a memorandum of understanding with Clariant are part of the company's long-term development and diversification strategy. Prior to this, we have also repeatedly established joint ventures, listed or unlisted companies In the form of joint investment and other forms of business development, the independent operation of special materials business will help this business unit achieve accelerated organic and inorganic growth. In addition, from the perspective of the company's macro strategy, we need to provide shareholders and customers As well as employees creating more value, we must also strive to build a world-class large-scale specialty chemical company. This decision is fully in line with this strategic requirement, "said SABIC Vice Chairman and CEO Youssef Al-Bayan.
Al-Bayan continued, "SABIC and Clariant have maintained a close cooperative relationship for many years, creating great value for the shareholders of both parties. We are now seeking to establish the highest level of strategic partnership and are committed to becoming a customized specialty material And technology's leading suppliers, benefiting both stakeholders and promoting the development of the specialty chemicals industry. "
"The current specialty chemicals businesses of Clariant and SABIC are complementary. The expected combination of Clariant's investment and the specialty chemicals business of both parties is fully consistent with SABIC's development strategy of opening up new growth opportunities in the specialty chemicals industry." -Bayan points out.
SABIC has recently received regulatory approval to acquire a 24.99% stake in Clariant, making SABIC the largest shareholder of the Swiss specialty chemicals company. SABIC has no current plans to initiate or otherwise fully acquire Clariant.
After completing the expected transaction, Clariant will establish a new "high-performance materials" business and become an extremely advantageous global growth platform. The platform combines expected cost synergies and operational efficiencies to create greater value for stakeholders on both sides. The transaction is expected to unlock the value of both parties' specialty chemical businesses. After regulatory approval, the transaction is expected to be signed in 2019 and completed in early 2020.
SABIC's special materials are widely used in intelligent electronic equipment, healthcare, aerospace, automotive, robotics, additive manufacturing and electric transportation. All key areas need to strictly follow customer specifications in the thermoelectric mechanical environment to meet regulatory requirements, which requires unique technology and professionalism to achieve.