Sabic is slimming down its business, agreeing to sell its European petrochemicals and Engineering thermoplastics (ETP) units in a SAR 3.6 bn (USD 950 mn) divestment. Sabic will sell the European petrochemicals unit to international investment firm AEQUITA and ETP to Germany’s Mutares. The divestments are the latest step in a multi-year effort to reshape its portfolio, the company said in separate filings to the bourse on Thursday.

Shedding unprofitable units

A steep accounting cost: As it pulls back from structurally challenged markets in Europe and the Americas, Sabic is offloading the assets far below their book value, booking a combined noncash impairment of SAR 18.3 bn in 4Q 2025. The European petrochemicals unit, carried at SAR 12.5 bn, will take a SAR 10.8 bn write-down, while the ETP business, valued at SAR 16.7 bn, will add a SAR 7.5 bn loss.

And the buyers got favorable terms: The SAR 1.9 bn sale of the European petrochemical business will be settled via “perpetual vendor notes,” meaning that Sabic is financing the acquisition for AEQUITA, with repayment tied to future cashflows. The SAR 1.7 bn ETP sale offers limited immediate liquidity, with just SAR 210 mn paid upfront and the remainder tied to performance-based earn-outs, payable only if buyer Mutares succeeds in turning the business around.

Why this matters

The divestments are part of a portfolio optimization program launched in 2022, which has already seen Sabic exit Functional Forms, Hadeed, and Alba as it seeks to strengthen core margins and unlock cashflow. By shedding lower-return Western assets, Sabic — which is 70% owned by Saudi Aramco — is doubling down on its core: high-return chemical operations. This portfolio restructuring also aligns with Aramco’s broader push to cut costs and streamline assets amid more volatile energy and chemicals markets.

What’s next: The European petrochemicals transaction is expected to close in 4Q 2026, while the ETP divestment is targeted for completion in 3Q 2026. With Hadeed, Alba, and now its Western plastics units off the books, Sabic’s next pruning target is the National Industrial Gases Company. The company confirmed it is still evaluating strategic options for the unit, including a potential IPO.

Sabic’s shares slid as much as 4.8% to hit their lowest level in nearly 17 years at SAR 48.2 apiece following the news of the divestment, according to Reuters. The stock pared back losses by the end of the session, closing up 0.49% at SAR 50.9, market data shows.

ADVISORS: Goldman Sachs acted as advisor on the European petrochemicals sale, while JPMorgan advised on the ETP divestment, with Lazard serving as independent financial advisor on both transactions.

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