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EU Clears SABIC's Buy of GE Plastics - ASHARQ AL-AWSAT English Archive
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BRUSSELS (Reuters) – Chemical company Saudi Basic Industries Corp. (Sabic) won permission from the European Commission on Friday to buy GE Plastics from General Electric Co. in a $11.6 billion cash deal.

“The Commission found that the product portfolios of both companies are largely complementary, Sabic focussing on raw materials and commodity plastics, GE Plastics being rather specialised in more refined types of plastics,” the Commission said in a statement.

GE Plastics, headquartered in Pittsfield, Massachusetts, employs 10,300 people in 60 countries and makes resins used in products ranging from health care equipment to packaging for consumer goods.

It has major factories in Indiana, New York, West Virginia and Alabama. In 2006, the division’s profit fell 22 percent to $674 million on slightly higher revenue of $6.65 billion.

As a top-ranked maker of petrochemicals, SABIC will be in a position to lower the raw-materials costs of the plastics business.

SABIC looks to borrow around $8.7 billion to pay for what is the largest acquisition ever made by a Gulf investor.

GE said it would receive net after-tax proceeds of about $9 billion, which would primarily be put toward its current stock buyback, upping its buyback target from $6 billion to a range of $8 billion to $9 billion.

Asharq Al-Awsat

Asharq Al-Awsat

Asharq Al-Awsat is the world’s premier pan-Arab daily newspaper, printed simultaneously each day on four continents in 14 cities. Launched in London in 1978, Asharq Al-Awsat has established itself as the decisive publication on pan-Arab and international affairs, offering its readers in-depth analysis and exclusive editorials, as well as the most comprehensive coverage of the entire Arab world.

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