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News Release from: Sabic Innovative Plastics
Edited by the Manufacturingtalk Editorial
Team on 25 May 2007
US plastics maker acquired by
petrochemicals firm
Middle eastern petrochemicals manufacturer, SABIC, is to acquire plastics materials producer GE Plastics for a purchase price of US$11.6 billion.
GE and Saudi Basic Industries Corporation (SABIC) today announced that they had reached agreement for SABIC to acquire GE Plastics for a purchase price of US$11.6 billion Announcement of the acquisition was made by Jeff Immelt, chairman and CEO of GE and Mohamed Al-Mady, vice chairman and CEO of SABIC
This article was originally published on Manufacturingtalk on 26 Feb 2004 at 8.00am (UK)
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"As a global operating company, SABIC has a long-term, strategic interest in the people, communities, customers, products, plants and technology of GE Plastics," said Al-Mady, in making the announcement.
"This acquisition represents another important step in SABIC's growth and diversification to become one of the world's leading manufacturing companies.This business is complementary to our existing business without any overlaps.
SABIC's intention is to grow the business globally," he added.
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"SABIC is well-positioned to do this, while adding high-performance plastics to the product range SABIC currently offers to customers." In earlier deals, SABIC has acquired DSM Petrochemicals business in Europe and the Huntsman Petrochemicals business in the UK.
In each case, existing management teams continued to manage the business, and have been given SABIC's support to implement various investment and growth initiatives.
"GE selected SABIC as the winner of this auction both for price as well as the company's premier position as one the world's fastest growing, innovative companies," said Immelt.
"With a strong reputation as a safe, responsible and efficient operator of large, state-of-the-art chemical plants, coupled with a commitment to investment in technology, SABIC is the smart choice to grow the GE Plastics unit." SABIC Americas, based in Houston, is the foundation for the company's long-standing commitment to USA operations, having operated here for more than 20 years.
SABIC also has long-term partnerships with prominent companies like ExxonMobil and Shell.
"SABIC has deep roots in America and extensive experience in operating in the USA as a leading chemical company," explained Al-Mady.
SABIC currently employs more than 200 people in the U.S.
through its own operations and a joint venture in New Jersey, plus another 500 people who are employed indirectly through suppliers.
With the acquisition, SABIC employment will swell to 30,000 people.
With worldwide manufacturing operations, GE Plastics is well-positioned to meet the needs of global customers under SABIC's ownership.
The closing of the transaction is subject to completing regulatory approvals and is expected to occur by the third quarter of 2007.
SABIC's advising bank is Citi as the investment banker, Shearman and Sterling/ Van Bael and Bellis as legal counsel, KPMG as the pension, financial and tax advisor, MERCER as the HR and Pension advisor, Jacobs Consultancy as the consultant on the plants, URS as the advisor of environmental Health and Safety and Booz Allen Hamilton as General consultant and program manager.
* About GE Plastics - GE Plastics is a global supplier of plastics resins widely used in automotive, healthcare, consumer electronics, transportation, performance packaging, building and construction, telecommunications and optical media applications.
The company manufacture and compounds polycarbonate, ABS, SAN, ASA, PPE, PC/ABS, PBT and PEI resins, as well as the LNP line of high-performance specialty compounds.
GE Plastics, Specialty Film and Sheet manufactures high-performance Lexan sheet and film products used in thousands of demanding applications worldwide.
In addition, GE Plastics' dedicated automotive organization is an experienced, world-wide competitor, offering leading plastics solutions for five key automotive segments: body panels and glazing; under the hood applications; component; structures and interiors; and lighting.
* About SABIC - Saudi Basic Industries Corporation (SABIC) is the largest public company in the Middle East, ranked by market capitalization (currently US$ 80 billion), and one of the world's 10 largest petrochemicals manufacturers.
The company is among the world's market leaders in the production of polyethylene, polypropylene, glycols, methanol and fertilizers as well as the fourth largest polymer producer.
SABIC's profit rose to a record US$5.4 billion in 2006, a 6% increase on 2005.
Sales revenues for 2006 totaled US$23 billion, the highest revenues achieved by the company since its inception.
Current assets at the end of 2006 were US$44.4 billion.
SABIC operates six interlinked strategic business units: Basic Chemicals, Intermediates, Specialty Products, Polymers, Fertilizers and Metals.
The company has significant research resources and has dedicated Research and Technology centers in Riyadh, Geleen in the Netherlands, Houston USA and Vadodara in India.
SABIC has more than 17,000 employees worldwide.
SABIC has two large production sites in Saudi Arabia - in Al-Jubail and in Yanbu - comprising 19 world-scale complexes.
Some of these complexes are partnerships with multi-national joint venture partners such as ExxonMobil, Shell and Mitsubishi Chemicals.
SABIC's overall production capacity has increased from 27 million tonnes in 2001 to 49.1 million tonnes of production in 2006.
SABIC's other global hubs are headquartered in Singapore for Asia Pacific with a sales office network and logistic hubs throughout the region; and in Sittard, the Netherlands, for Europe.
In Europe, the company employs around 3,300 people, had a European sales office network, logistic hubs and three petrochemical manufacturing sites at Geleen (the Netherlands), Teeside (United Kingdom) and at Gelsenkirchen (Germany).
SABIC Europe produces 2.5 million tonnes per annum of polyolefins and 3.3 million tonnes of basic chemicals.
Headquartered in Riyadh, Saudi Arabia, SABIC was founded in 1976 when the Saudi Arabian Government decided to use the hydrocarbon gases associated with its oil production as the principal feedstock for production of chemicals, polymers and fertilizers.
The Saudi Arabian Government owns 70% of SABIC shares with the remaining 30% held by private investors in Saudi Arabia and other Gulf Cooperation Council countries.
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