Saudi Arabia’s sovereign wealth fund is set to create a new national steel giant with the acquisition of the metals unit of chemicals maker Saudi Basic Industries Corp. for an enterprise value of 12.5 billion riyals ($3.3 billion).
The Public Investment Fund (PIF) will acquire Saudi Iron & Steel Company from SABIC, as the chemicals firm is known. In a separate deal, Sabic’s steel unit Hadeed will acquire AlRajhi Steel Industries Co. in exchange for stock, according to a statement. The deal is expected to close before the end of the first quarter of 2024 and the final sale price will only be finalized then.
The accord is the latest sign of the Saudi wealth fund’s growing influence over the Arab world’s largest economy. The PIF is responsible for most of the country’s projects intended to help diversify away from its reliance on oil sales, including developing an auto-manufacturing hub, tourism projects and building vast new cities.
( Matthew Martin | Saudi Arabia Bureau Chief at Bloomberg LP)