Riyadh, September 3, 2023, The Saudi Basic Industries Corporation (SABIC) has agreed to sell its whole interest in the Saudi Iron & Steel Company (Hadeed) to the Public Investment Fund (PIF), which made the announcement today. In accordance with a cross-conditional share exchange agreement, Mohammed Abdulaziz AlRajhi & Sons Investment Company (Rajhi Invest) would exchange newly issued shares of Hadeed for a 100% interest in AlRajhi Steel Industries Company (Rajhi Steel). The above-mentioned agreements (the transactions) must satisfy a number of requirements in order to be completed, including customary approvals from the appropriate authorities. The final shareholding in Hadeed by PIF and Rajhi Invest will be completed subject to the closing procedures outlined in the agreements. The transactions are consistent with PIF's broader initiatives to hasten Saudi Arabia's industrial growth and will help Saudi Arabia fulfill its rising domestic steel demand and enhance its steel production capacity. Additionally, in line with Saudi Vision 2030, the transactions will support the expansion of important downstream industries such as domestic automotive, construction, utilities, renewable energy, transportation, and logistics.
The transactions will enable Hadeed and Rajhi Steel to combine their top-notch steel mills, unmatched expertise, and leadership in the steel sector in order to enhance their individual production capacities and boost operational effectiveness.
Yazeed A. Al-Humied, PIF's deputy governor and head of MENA Investments, stated: "The steel industry is fundamental to the Saudi economy's diversification and growth. These deals would combine the financial strength and business acumen of PIF with the top technical and commercial know-how of Hadeed and Rajhi Steel to establish a national champion in Saudi Arabia's steel industry. They also expand on PIF's mandate to create fresh strategic alliances to support business.
Over the years, Hadeed's contribution to the construction industry and urban and civil development in the Kingdom of Saudi Arabia, as well as to the success and growth of SABIC, has been significant," SABIC CEO Abdulrahman Al-Fageeh said. However, we are aware that Hadeed has additional potential to rank among the largest iron and steel producers in the GCC. Finding the proper purchasers was crucial for SABIC in order for Hadeed to realize its full potential. SABIC will be able to concentrate on its plan to become the preferred global leader in chemicals thanks to the sale of Hadeed in the interim.
Today's announcement is a significant milestone for Rajhi Invest and Rajhi Steel," said Yazid Mohamed Al-Rajhi, chairman of the board of Rajhi Invest. In order to help Hadeed better fulfill its customers' future demands, we are eager to combine our resources and expertise with those of PIF and Hadeed.
The transactions are consistent with PIF's overarching plan to concentrate on the growth of 13 important industries, including the mining and metals industries.
