The PIF Of Saudi Arabia Is Set To Take Control Over The Country’s Top Steel Producers
by upasana sarbajna Business 04 September 2023
The sovereign wealth trust of Saudi Arabia is all set to build a new national steel colossal with the acquisition of the metals sector of the chemical manufacturer Saudi Basic Industries for an enterprise that is worth the value of 12.5 billion riyals, approximately $3.3 billion.
The Public Investment Fund supposedly will be acquiring the Saudi Iron and Steel Company from Sabic, which is the name of the chemicals organization. In a different deal, Sabic’s steel sector, Hadeed, will be acquiring AlRajhi Steel Industries in an exchange for stocks, as per the statement given.
The deal is anticipated to close before the first quarter of 2024 ends, and the closing price will also be finalized then.
Stocks of Sabic increased 1.92% to a high of 90.1 riyals per share before pairing the profits.
The tender is the latest sign of the growing influence of Saudi’s wealth fund over the largest economy of the Arab world. The PIF is also responsible for the maximum of the projects in the country that are intended to diversify away from its dependence on the sales of oil, which also includes constructing an auto manufacturing hub, building vast new cities, and incorporating newer tourism projects.
“These transactions will bring together PIF’s financial capabilities and industry experience with Hadeed and Rajhi Steel’s leading technical and commercial expertise, to create a national champion in Saudi Arabia’s steel sector,” the Deputy Governor of PIF, Yazeed Al-Humied, and the head of the Middle Eastern and North African investments added.
Sabic, which is one of the most prestigious chemicals firms in the world, said that the sale of Hadeed will enable it to concentrate more on its core business, which is the production of petrochemicals. The chemical producer has struggled amid a weakening world economy, reporting an 85% drop in profits within the second quarter.
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