RIYADH (AFP) – State-owned Saudi Basic Industries Corp (SABIC) said Saturday it would fund its 11.6 billion dollar purchase of General Electric’s plastics division with bonds and loans.
“I expect the bonds will make up 25 percent and the bank loans the remaining 75 percent,” said SABIC chairman Prince Saud bin Thunayan Al-Saud, adding that the bonds would be sold in the United States and Europe.
The transaction marks one of the largest acquisitions of a US business by a Middle East company.
Saud said GE Plastics would be completely transferred to SABIC in the third quarter of this year.
GE Plastics produces plastic resins used in the automotive, healthcare, building and construction, telecommunications and other sectors. Saud said SABIC intends to boost production to 120 million tonnes from 50 million by 2020.
SABIC is the Middle East’s largest public company by market capitalization and one of the world’s 10 biggest petrochemicals manufacturers.
Its US arm, SABIC Americas, is based in Houston, Texas, and already runs some operations in the United States, but the deal with GE will significantly enlarge its global footprint, including in the fast-growing Chinese and Indian markets.