A Saudi chemical company will take over General Electric's plastics division in a deal worth $11.6 billion, the companies said today. Saudi Basic Industries Corp., or Sabic, beat out Dutch-owned Basell for GE Plastics, which was put up for sale in January. The purchase, the largest ever by a Gulf-based company, is seen as a coup for Sabic.
The sale is CEO Jeff Immelt's latest move to diversify GE into faster-growing industries. GE Plastics, once an engine for innovation, has become a commodity producer facing volatile commodity prices. That’s what makes Sabic a good fit, Bloomberg suggests: It uses by-products from Saudi Arabia's oil and natural gas industries to produce plastic at a lower cost than international competitors.