RIYADH, SAUDI ARABIA – The Public Investment Fund (PIF) on Sunday announced the signing of a share purchase agreement to acquire a 100 percent shareholding in the Saudi Iron & Steel Company (Hadeed) from the Saudi Basic Industries Corporation (SABIC).
Based on a cross-conditional share exchange agreement, Hadeed will also acquire a 100 percent shareholding in AlRajhi Steel Industries Company (Rajhi Steel) from Mohammed Abdulaziz AlRajhi & Sons Investment Company (Rajhi Invest), in exchange for newly issued shares in Hadeed.
The completion of the aforementioned agreements is subject to certain approvals from the relevant authorities and satisfaction of certain conditions in the transaction agreements.
PIF and Rajhi Invest’s final shareholding in Hadeed will be finalized subject to the closing mechanics set in the agreements.
The transactions are in line with PIF’s broader efforts to accelerate Saudi Arabia’s industrial development and will contribute to meeting the growing local demand for steel and improving the Kingdom’s steel production capabilities.
The transactions will contribute towards the growth of key downstream sectors, such as local construction, automotive, utilities, renewables, transport and logistics, in line with Saudi Vision 2030.
The transactions will allow Hadeed and Rajhi Steel to bring together their steel plants, leadership and experience in the industry to improve the respective production capabilities and increase operational efficiency.
Deputy Governor and head of MENA Investments at PIF Yazeed A. Al-Humied said, “The steel industry is important for the Saudi economy and its diversification and growth.”
He said, “These transactions will bring together PIF’s financial capabilities and industry experience with Hadeed and Rajhi Steel’s technical and commercial expertise to create a national champion in Saudi Arabia’s steel sector.”
SABIC CEO Abdulrahman Al-Fageeh said, “Over the years Hadeed’s contribution to the construction sector, urban and civil development in Saudi Arabia as well as to the success and growth of SABIC has been considerable.”
He said, “The sale of Hadeed will enable SABIC to focus on its strategy to become the preferred world leader in chemicals.”
Board Chairman of Rajhi Invest Yazid Mohamed Al-Rajhi said, “The announcement is a significant milestone for Rajhi Invest and Rajhi Steel. We’re excited to bring together our capacity and expertise to enable Hadeed to better meet the future demands of its customers.”
The transactions are in line with PIF’s wider strategy to focus on the development of 13 strategic sectors, including metals and mining.