Saudi Basic Industries Corp (SABIC) has acquired a 24.99% stake in Swiss specialty chemicals company Clariant, becoming the largest shareholder in the company.
It acquired the stake from White Tale Holdings, a Cayman Islands-based investment vehicle controlled by hedge funds Corvex and 40 North. The closing of the transaction is subject to completing regulatory approvals.
The Riyadh-based chemical manufacturer says it currently has no plans to launch or otherwise effect a full takeover of Clariant. SABIC did not reveal financial terms of the sale, but the stake projects to be worth about $2.4 billion based on Clariant's market capitalization at the time of press.
The company reports the acquisition is part of its long-term growth strategy of product differentiation, with Clariant complementing SABIC's existing specialties business. SABIC’s move to target an acquisition in speciality chemicals comes as Saudi Arabia as a whole is pursuing economic diversification, as per its Vision 2030 plan.
According to a press release regarding the sale, SABIC had previously entered into a joint venture with Clariant to form a process technology and catalyst development company.
“Clariant intends to engage with SABIC over the coming weeks in order to discuss the new situation and explore possible ways to create value. Clariant will also continue the existing dialogue with all its other shareholders,” said the Swiss company in a statement.
White Tale’s exit comes as a bit of a surprise, following assertions late last year that it planned to be a long-term investor in Clariant. However, the two were then embroiled in a fight over the company’s future.
Last year, White Tale reportedly blocked Clariant’s merger with U.S.-based chemical company Huntsman Corporation. White Tale also denied reports from Clariant that it was advocating for the break up of the company.
40 North, one of the funds behind White Tale, called the sale to SABIC a positive development. "SABIC is an established global leader in the chemicals industry with a world-class management team and a long-term, sophisticated vision for the future. We are confident that this transaction allows Clariant to continue on its path to becoming a global specialty chemicals leader,” said David Winter, Co-CIO of 40 North, in a statement.