Saudi Gazette report

RIYADH — In a significant development for the Saudi Arabian steel industry, the Public Investment Fund (PIF) has announced the signing of a share purchase agreement to acquire a 100% shareholding in the Saudi Iron & Steel Company (Hadeed) from the Saudi Basic Industries Corporation (SABIC).

Simultaneously, Hadeed will acquire a 100% shareholding in AlRajhi Steel Industries Company (Rajhi Steel) from Mohammed Abdulaziz AlRajhi & Sons Investment Company (Rajhi Invest). This exchange involves newly issued shares in Hadeed.

The successful completion of these transactions is subject to customary approvals from relevant authorities and conditions stipulated in the transaction agreements.

The final shareholding in Hadeed for both PIF and Rajhi Invest will be determined according to the closing mechanics outlined in the agreements.

These strategic transactions align with PIF’s broader objectives to accelerate Saudi Arabia’s industrial development and cater to the increasing local demand for steel, thereby enhancing Saudi Arabia’s steel production capabilities.

Additionally, they will bolster key downstream sectors, including local construction, automotive, utilities, renewables, transport, and logistics, in line with the vision set forth in Saudi Vision 2030.

These transactions will amalgamate Hadeed and Rajhi Steel, bringing together their world-class steel plants and unparalleled expertise in the steel industry.

This union aims to boost their respective production capabilities and operational efficiency.

Yazeed A. Al-Humied, deputy governor and head of MENA Investments at PIF, said: “The steel industry is foundational to the Saudi economy, its diversification, and its growth.

“These transactions leverage PIF’s financial capabilities and industry experience in conjunction with Hadeed and Rajhi Steel’s leading technical and commercial expertise, creating a national champion in Saudi Arabia’s steel sector.

“They are also consistent with PIF’s mandate to establish strategic partnerships, further enabling the private sector.”

Abdulrahman Al-Fageeh, CEO of SABIC, commented: “Over the years, Hadeed has significantly contributed to the construction sector, urban and civil development in the Kingdom of Saudi Arabia, and the success and growth of SABIC.

“However, we recognize that Hadeed possesses untapped potential to become a major player in the GCC region’s iron and steel industry.

“Thus, it was imperative to find the right buyers who can unlock Hadeed’s full potential. The sale of Hadeed will allow SABIC to concentrate on its strategy to become the preferred global leader in chemicals.”

Yazid Mohamed Al-Rajhi, board chairman of Rajhi Invest, added: “Today’s announcement marks a significant milestone for Rajhi Invest and Rajhi Steel.

“We are excited to merge our capacity and expertise with that of PIF and Hadeed, positioning Hadeed to better meet the evolving demands of its customers.”

These transactions align seamlessly with PIF’s broader strategy, which includes a focus on developing 13 strategic sectors, including the Metals & Mining sector.