Saudi Basic Industries Corp, the Middle East’s biggest petrochemicals maker, is exploring an acquisition of OCI’s methanol assets that would solidify its status as one of the world’s biggest producers of the chemical, people familiar with the matter said.
The Saudi Arabian company has made an initial approach that valued OCI’s assets, which include plants in Texas and the Netherlands, at as much as $4 billion, the people said, asking not to be identified because the discussions are private.
Preliminary discussions between Sabic, as the state-controlled firm is known, and OCI may not lead to an agreement, they said.
Representatives for Sabic and Amsterdam-based OCI, which has a market value of about 4.5 billion euros ($5.1 billion), declined to comment.
Saudi Arabia is hoping to tap into growth in demand for chemicals like methanol, and is seeking more acquisitions to speed expansion in refining and petrochemicals. State-owned Saudi Arabian Oil Co is in talks to buy a majority stake in Sabic, which could be valued at as much as $70 billion, from the kingdom’s sovereign wealth fund.
Sabic and Switzerland’s Clariant are also discussing ways to combine their specialty chemicals businesses, CEO Yousef Abdullah Al Benyan said last month.
Methanol is primarily used to make other chemicals, such as formaldehyde, and derivatives used in adhesives, resins, paint removers and polyester fibers, according to OCI’s website.
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