Sabic sells Hadeed to PIF in a bid to expand other business: KSA’s leading petrochemical company Saudi Basic Industries Corporation’s (Sabic) has sold steels subsidiary Saudi Iron and Steel Company (Hadeed) to Saudi Arabia’s sovereign wealth fund the Public Investment Fund (PIF) at an enterprise value of SAR 12.5 bn (c. 3.3 bn), according to a statement.

The rationale: The divestment will allow Sabic to “optimize its portfolio and focus on its core business,” Sabic said in a statement (pdf), adding that it would also bring it closer to being the world’s preferred chemicals company. It would align with the PIF’s efforts to progress the country’s industrial development and meet growing local demand for steel. It will also contribute to the growth of several sectors including renewables and mining, Sabic said.

Could part of that focus include low-carbon ammonia? Saudi chemical manufacturer Sabic Agri-Nutrients — an agri-nutrients business in which Sabic holds a 50.1% stake — has been tapping the low-carbon ammonia market. In June, it shipped its first 5k metric ton load of low-carbon ammonia to Taiwan. The shipment in June followed another 5k ton load of low-carbon ammonia to India in May, an undisclosed quantity to Japan in April, and 25k tons of low-carbon blue ammonia to South Korea last November.

Keep an eye on early 2024: The transaction, which is subject to customary conditions and regulatory approvals, is expected to close before the end of the first quarter of 2024. The final sales price will be disclosed before the mentioned period next year.

About Hadeed: Sabic’s steels unit focuses on manufacturing steel products, including reinforcing bar, coiled wire, billets, slabs, sections, hot and cold rolled coil, galvanized coil, preprinted coil and hot film laminated coil.