SABIC considers divesting US plastics distributor for USD500 million; not a game changer
According to an article on Bloomberg, SABIC is currently considering the sale of its US based distribution business, Polymershapes, which was part of SABIC's USD11.6 billion acquisition of general electric company's plastics operations in 2007. Polymershapes is the world’s largest distributor of plastic films, sheets and rods used to make products ranging from aircraft to building materials. The article mentions that the business is valued at USD500 million, according to sources familiar with the matter. We do not think the sale of Polymershapes would be a game changer for SABIC given its minimal size (less than 1% of SABIC's current market cap), but we view this positively from a bigger picture perspective, as this could be the start of further restructuring and more asset sales. Given that SABIC’s US assets have historically been loss-making and a drag on earnings, more assets sales or restructuring on this front could eventually translate to improved earnings and operations for SABIC. (Bloomberg, Ahmed Hazem Maher, Yousef Husseini) SABIC: SAR76.77 as of 24 March 2016, Rating: Buy, FV: SAR85.00 per share, MCap: USD61,416 million, SABIC AB / 2010.SE
This website uses cookies to make the site work, to understand if the site is working well, how it is being used, to connect to social media sites (such as Facebook and Twitter) and to collect information useful to allow us and our partners to provide you with more relevant ads . Some cookies are essential to make the site work, but you can control how we use non-essential cookies at any time by clicking the “ON/OFF” button next to each category. For more information about the cookies used on this site, see Privacy Policy.
Decide which cookies you want to allow.
Strictly Necessary
These cookies are essential in order to enable you to move around our website and use its features, such as accessing secure areas of our website. Without these cookies, any services on our Site you wish to access cannot be provided.
Analytical/performance cookies
Visitors use our website, for instance which pages you go to most often, and if you get error messages from web pages.