Closing of $450 million transaction completed as SABIC accelerates exit from inefficient petrochemical assets in Europe and the US

It was recently learned that SABIC announced that it has completed the sale of its Engineering Thermoplastics (ETP) business in Europe and the Americas on August 3, 2026. The enterprise value for this transaction was USD 450 million, and the acquirer is German company Mutares SE & Co.

The transaction was announced to the public in early 2026. The assets proposed for divestment cover multiple production units for Polycarbonate, PBT (Polybutylene Terephthalate), and ABS. The production bases are located in Brazil, Canada, Mexico, the Netherlands, Spain, the United States, and other countries, spanning markets in Europe, the Americas, and Latin America.

Divesting Loss-Making Assets to Improve Profitability and Increase Return on Capital

SABIC stated that completing the divestiture of the ETP business is a crucial part of the company's portfolio optimization strategy. By exiting structurally inefficient assets, the company can reduce cash losses from the business, raise the overall return on capital, and serve the long-term value of shareholders.

The divested business has been in a continuous state of loss. Financial data show that in 2025, the sector recorded an operating loss of approximately USD 498 million (equivalent to 1.9 billion Saudi Riyals); in the first half of 2026, losses continued, amounting to approximately USD 173 million (equivalent to 648 million Saudi Riyals).

If this loss-making business is excluded, SABIC's overall EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) margin is expected to increase by 1.30%-1.40%. The effect of the asset divestiture on improving the company's profit structure is significant.

Q2 Performance Under Pressure: Revenue and Profit Decline Quarter-on-Quarter, Adjusted Net Loss Recorded

Just one week before the completion of this asset divestiture, on July 29, SABIC released its financial report for the second quarter of 2026, showing that multiple core indicators weakened quarter-on-quarter:

· Sales revenue was 24.81 billion Saudi Riyals, equivalent to USD 6.62 billion, a decrease of 5% quarter-on-quarter

· Adjusted EBITDA was 3.38 billion Saudi Riyals, equivalent to USD 900 million, a decline of 18% quarter-on-quarter

· Adjusted EBIT was 410 million Saudi Riyals, equivalent to USD 110 million, a sharp drop of 72% quarter-on-quarter

· Adjusted net loss recorded was 380 million Saudi Riyals, equivalent to USD 100 million

· Adjusted earnings per share was 0.13 Saudi Riyals, equivalent to USD 0.03

On the liability side, as of June 30, 2026, the company's net debt was 2.73 billion Saudi Riyals, equivalent to USD 730 million, a slight retreat from 2.77 billion Saudi Riyals at the end of the first quarter.

SABIC CEO Dr. Faisal Al-Faqeer commented on the second-quarter performance, stating that despite current market pressures including geopolitical uncertainty, supply disruptions, and high energy costs, the company's overall operations remain robust, and various strategic initiatives are being implemented as scheduled.

Transformation Continues: Cost Reduction Targets and Asset Integration Proceed in Parallel

The corporate transformation plan continues to release cost-saving results. In the first half of 2026, an EBITDA improvement of 547 million Saudi Riyals was achieved, steadily progressing toward the goal of a cumulative USD 3 billion annual improvement by 2030.

Multiple lines of business portfolio optimization are being implemented simultaneously. In addition to the completion of the ETP business in Europe and the Americas, the previously signed divestiture transaction for the European petrochemical business is also proceeding in an orderly manner. At the same time, the company has agreed on key terms and plans to merge two major joint venture storage and transportation enterprises, Sabtank and Chemtank, via a share swap to create a national-level petrochemical logistics platform in Saudi Arabia. This transaction is still awaiting regulatory approval.

Key Projects Accelerate Implementation, Diversified Layout in the Chinese Market

While divesting inefficient assets, SABIC continues to increase investment in high-potential growth projects, especially expanding its business layout in China:

· The construction of the Sino-Saudi Gulei ethylene project is proceeding as planned, with production expected to start in the fourth quarter of 2026;

· The million-ton MTBE plant in Saudi Arabia has achieved commercial operation;

· Signed an agreement with Rongsheng Petrochemical to jointly develop the Zhejiang Zhoushan Jintang New Materials project, targeting the advanced chemical materials market in Asia;

· There are also investment plans for a new thermoplastic engineering plastics alloy factory in Fujian.

Future Strategic Direction: Continuously Optimizing Assets and Focusing on High-Value Sectors

SABIC stated that it will continue to execute the two main lines of corporate transformation and business portfolio optimization. On one hand, it will continue to dispose of inefficient and loss-making assets; on the other hand, it will increase investment in key growth projects to improve operational quality, enhance shareholder returns, and pursue long-term sustainable value.