Saudi chemical giant SABIC exploring IPO for its gas subsidiary
Saudi Basic Industries Corporation (SABIC), one of the world's largest petrochemical manufacturers, is considering listing of its gas subsidiary, National Industrial Gases Company, later this year.
SABIC, which is 70 per cent owned by Aramco, has been considering the idea for some time. Reuters reported in August 2021 that the company had selected HSBC and Morgan Stanley to work on the initial public offering (IPO), but it did not materialise that year.
SABIC plans subsidiary listing
Now, Bloomberg has reported, citing people familiar with the matter, that SABIC is in 'preliminary discussion with potential advisers, such as Lazard Inc., HSBC Holdings, JPMorgan Chase & Co. and Morgan Stanley, on listing National Industrial Gases Company as soon as this year'.
SABIC owns 74 per cent of National Industrial Gases, which generated SAR1.6 billion (US$427 million) in revenue in 2024.
Sources told Bloomberg that discussions were at 'a preliminary stage, and no final decisions have been made on timing or adviser mandates'. However, the companies mentioned above are yet to comment.
Global chemicals producers are under pressure from soft demand, rising costs and shrinking margins, added Bloomberg. SABIC itself has posted two consecutive quarterly losses and is planning a restructuring to reduce expenses. Its shares have fallen nearly 10 per cent since the start of the year, compared with a decline of about 5 per cent for the broader Saudi index.
Saudi Arabia has been the most active among the MENA countries this year in IPOs. In a report, Ernst & Young said earlier this month that total proceeds during Q1 2025 reached US$2.4 billion, up by 106 per cent year-on-year, as the number of listings rose to 14, from 10 in Q1 2024. The Kingdom led in both activity and proceeds, recording 12 of the 14 listings in the region. The five offerings on the Saudi Stock Exchange (Tadawul) generated US$1.8 billion and seven listings on the Nomu Parallel Market secured US$69 million.
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