Skip to content Skip to Search
Skip navigation

Sabic to sell steel subsidiary to PIF for $3.3bn

Reuters/Umit Bektas
The divestment is a continuation of ArcelorMittal’s strategy initiated in 2012 when it started reducing its stake in Erdemir

Saudi Basic Industries Corporation (Sabic) has signed an agreement to sell its 100 percent stake in its steel manufacturing subsidiary to the Public Investment Fund (PIF) for SAR12.5 billion ($3.33 billion).

The final sale price for Saudi Iron & Steel Company (Hadeed) will be determined only on the deal closure date, which is expected to be before the end of Q1 2024, Sabic said in a statement to the Saudi bourse on Sunday.

The transaction will provide Sabic with liquidity, which will be used to reinforce its growth in the chemicals industry.

The fair valuation of Hadeed’s net assets is expected to result in a non-cash loss of SAR2 billion to SAR 2.5 billion in Sabic’s third-quarter earnings.

Yazeed A Al-Humied, deputy governor and head of Mena Investments at PIF, said the steel industry is “foundational” to the Saudi economy’s growth and this latest deal was part of PIF’s aim “to create a national champion” within the sector.

The steel sector plays a vital part in the kingdom’s massive development plans as part of Vision 2030. Real estate consultancy company Knight Frank last year described Saudi Arabia as the biggest construction site the world has ever seen as projects valued at over $1.1 trillion are under way in the kingdom.

It said the Red Sea city of Jeddah has $90 billion worth of development plans including 89,000 homes, more than 2,700 hotel rooms, 1.4 million sq m of retail space and 250,000 sq m of new offices.

Major infrastructure projects in the city include the expansion of Jeddah Islamic Port and the $7 billion Saudi Land Bridge Project, a rail link connecting the kingdom’s seaports on the Red Sea coast with those on the coast of the Arabian Gulf via Riyadh.

Latest articles

The funding of Midas is among the 'biggest ever' Series A fund raise by a Turkish fintech

Turkish fintech Midas raises $45m for new products

Turkish fintech startup Midas has raised $45 million in equity funding to expand its services and launch new products. The new products include cryptocurrency trading, mutual funds and savings accounts. The funding is among the “biggest ever” Series A fund raise by a Turkish fintech and comes less than three years after Midas was launched.  […]

Plenary founder and director Paul Oppenheim, Plenary CEO David Lamming and Ahmed Ali AlShamsi, director of energy and utilities at ADQ

ADQ buys stake in Australian investment company

The UAE’s investment fund ADQ has acquired a 49 percent stake in Australian infrastructure investor Plenary Group as part of its expansion drive. The Abu Dhabi state-backed company will acquire all shares currently owned by Canadian pension fund Caisse de dépôt et placement du Québec, which will continue to invest in a range of Plenary’s […]

Garden, Nature, Outdoors

UAE commits $50m to development fund

The UAE has committed $50 million to the second phase of the Lives and Livelihoods Fund 2.0 (LLF 2.0), a multi-donor initiative targeting sustainable economic development in the Islamic Development Bank’s (ISDB) 57 member countries. The funding will be deployed by LLF 2.0 to support critical projects in health and infectious diseases, agriculture, and social infrastructure in low […]

Abu Dhabi’s last debt market activity included a $2 billion bond in May 2021 followed by a further $3 billion in September

Abu Dhabi launches $5bn bond issue

Abu Dhabi has initiated $5 billion in a three-tranche bond after a hiatus of three years, according to a media report. The $1.75 billion five-year bond, $1.5 billion 10-year tranche and $1.75 billion 30-year issue was priced at 35, 45 and 90 basis points, respectively, over US Treasuries, fixed income news service IFR reported. Abu Dhabi […]