Saudi Arabia’s SABIC has received a green light to go ahead with its planned acquisition of 24.99% of Swiss chemical company Clariant, and is now proceeding with a new joint venture with the company, according to the Wall Street Journal.
SABIC will pay $2.5 billion for the stake and “now the two companies are creating a joint venture in plastics and specialty chemicals that are part of Clariant’s effort to boost margins after a failed merger effort last year,” the WSJ reports based on Clariant’s strategic update.
According to the WSJ, SABIC’s contribution to the joint venture is twice the size of Clariant’s in sales and earnings before interest, tax, depreciation and amortization. But Clariant will be the majority shareholder in the unit, to be called High Performance Materials, which is why it will make a payment to SABIC.
In a separate announcement, Saudi Arabian General Investment Authority (SAGIA) said it has awarded four Swiss companies investment licenses that will enable the launch of their operations in the Kingdom.
Roche Diagnostics Saudi Arabia, SICPA-Jameel, MEDLOG-Saudi Arabia and ABB Substations Contracting Company received their licenses on the sidelines of the 11th session of the Saudi-Swiss Joint Commission, held recently in the Swiss capital Bern.
