Saudi Arabia’s petrochemical maker SABIC is weighing an initial public offering (IPO) of its specialty chemicals business, Bloomberg reported, citing sources familiar with the matter. According to them, the company is in talks with advisers on a potential public listing as early as 2021 for the business that generates about $2 billion of revenue annually. The sources noted that the talks were still at an early stage and it remained unclear whether they would lead to any transactions.
If realized, the IPO would help SABIC raise funds after the company said earlier this year that it would suspend capital spending to protect its balance sheet. A domestic listing will also allow Saudi Arabia to attract more foreign investors. SABIC’s shares gained 1.6% on the Tadawul on Wednesday morning. The shares have increased by 4.3% year-to-date.
In recent years, SABIC’s growth strategy has been focusing on specialty chemicals. SABIC has previously said that it would separate the division into a standalone business by November 1. It is boosting its specialty chemical capacity, with new expansions expected to start up in the Netherlands in 2021 and Singapore in 2022. The company acquired a stake in Clariant in 2018 to expand its portfolio of products used in cosmetics, biofuel, and catalysts. Earlier, this year, SABIC increased its stake in Clariant to 31.5%
