GE Plastics takeover creates SABIC Innovative Plastics

Our Corporate Bureau
03 September 2007

Saudi Basic Industries Corporation has completed its purchase of GE Plastics from General Electric. The unit, purchased for $11.6 billion, has been renamed SABIC Innovative Plastics. The company has appointed Brian Gladden as CEO of the unit.

SABIC gains technology edge from GE

When Nissan Design America began designing its Bevel Concept car, the team recognised that traditional glass could not deliver the unusual glazing components they envisioned. The Bevel Concept, a utility vehicle that targets middle-age men with many hobbies and activities, features asymmetrical styling, a roof cargo system, and other unique glazing designs that were not possible to achieve with glass. In addition, because the car is designed to be environmentally responsible - for example, it features roof-mounted solar panels - Nissan wanted to find ways to reduce overall vehicle weight for fuel savings. As a longstanding GE Plastics customer, Nissan approached the plastics supplier to help identify a glazing solution.

SABIC Innovative Plastics will focus on thermoplastics and engineering plastics for the automotive, electronics, healthcare and construction industries. The acquisition will expand the Saudi company''s plastics product portfolio and give it access to new global markets.

The Saudi company plans to expand SABIC Innovative Plastics'' operations to include substantial additional plants in the Americas, Europe and the Asia Pacific region. The company''s management also expects to benefit more broadly from the competencies embodied in the people, products and technologies of the former GE unit.

The business profile of the acquired unit and SABIC''s strengths helped raise the funds required for the acquisition. Thus the deal has been completed on time despite the prevailing turmoil in the world''s capital markets.

This acquisition is part of a drive by companies in oil-producing Gulf Corporation Council (GCC) countries to go global. They have got a big boost since 2002, with the sharp rise in oil prices, which has resulted in six consecutive years of budget and current account surpluses.

This is SABIC''s third major acquisition in since 2002, when it acquired DSM Petrochemicals from Dutch chemicals major DSM, which disposed of this unit as part of a strategic restructuring. In 2006 SABIC acquired the European operations of Huntsman''s petrochemicals businesses.