Sabic looks to Italy

15 October 2001

Saudi Basic Industries Corporation (Sabic)is involved in negotiations with Italy's Eniover the Saudi company's proposed acquisition of Enichem. Sabic says the discussions are at an early stage and are being undertaken in parallel with negotiations with other chemicals companies worldwide as part of its strategy to move into external markets.

Sabic is the largest manufacturer in the Middle East, with a production capacity of some 35 million tonnes a year (t/y). Its target is to increase production to 48 million t/y by 2010. Eni in 2000 achieved production of 8.5 million tonnes of product, including olefins, polyethylene, styrene and elastomers. It had sales valued at $5,526 million in 2000.

Italian press reports say discussions between the two parties now centre on the extent of management control the Saudi company would enjoy. It is understood to be seeking a 51 per cent stake in the company in the long term. Eni has been seeking to divest its chemicals business to concentrate on core operations since earlier this year when Enichem began weighing down the group's profits.

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