Saudi Basic Industries Corporation (SABIC) signed an agreement to purchase NESTE Oil's 10% stake in the Saudi European Petrochemical Company (IBN ZAHR). Following the transaction, SABIC will own 80% of IBN ZAHR shares and the remaining shareholders, Apicorp and Ecofuel SpA, 10% each. The deal, which is valued at $120 million, is expected to be closed during the second quarter of 2006.
Mohamad Al-Mady, SABIC Vice Chairman and CEO, said this agreement reflects SABIC's capability to manage giant manufacturing plants. This agreement will further enhance SABIC's overall operational results as IBN ZAHR is a well-run and highly profitable company and a leader in the production of MTBE and polypropylene. MTBE is an environment-friendly gasoline additive which contributes to the efforts to ensure safety, and protect health and environment. Propylene is a thermal plastic product increasingly used in plastic's industries, domestically and globally.
Established in 1984, IBN ZAHR is SABIC's first joint venture with European companies. It's complex in the Jubail Industrial City went on-stream in 1988 and later witnessed a number of expansion project. Over the last few years, IBN ZAHR achieved the highest levels of production, exceeding designed capacities.
