SABIC near to acquiring GE Plastics for $11bn

18 May 2007 13:06  [Source: ICIS news]

LONDON (ICIS news)--SABIC has emerged as the frontrunner in the race to acquire GE Plastics, bidding about $11bn (€8bn), wire services reported on Friday quoting sources close to the deal.

The suggested purchase price would be above the €8bn to €10bn range within which the plastics unit was expected to sell, Bloomberg said.

SABIC was believed to be among the final bidders for the maker of polycarbonate and engineering plastics alongside privately held Basell and Apollo Management.

A decision on the sale of the business was expected as early as Friday.

Sabic had signalled its intention to move further downstream in plastics with the development of a polycarbonate business a priority.  

GE confirmed in January that it wanted to sell the unit and expected closing in the third quarter of this year.

Profits had dropped sharply in the wake of higher benzene feedstock costs. A poor outlook for polycarbonate was another reason given by analysts for GE’s decision to sell.

SABIC is currently generating record profits with the global petrochemicals business at the peak of its cycle.

First quarter profits leaped 50% to a record Saudi riyal (SR) 6.3bn ($1.7bn).

Profits from GE Plastics dropped 45% in the quarter.

Segmental profit in the GE plastics business was $121m for the three months ended 31 March, down from $225m in the 2006 first quarter. Revenues came to $1.598bn, down from $1.644bn.

($1=SR3.75)

By: Nigel Davis
+44 20 8652 3214

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