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Burgeoning Saudi Firm Snags GE Plastics

$11.6B deal is Gulf region's biggest ever

By J. Kelman,  Newser User

Posted May 21, 2007 1:29 PM CDT
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(Newser) – 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.

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(FILES)This 18 September 2003 file photo shows the GE logo on...
(FILES)This 18 September 2003 file photo shows the GE logo on...   (Getty Images)
Jeffrey Immelt, Chairman and CEO of GE, speaks at the company's healthcare summit on Tuesday, May 15, 2007 in New York. (AP Photo/Mark Lennihan)
Jeffrey Immelt, Chairman and CEO of GE, speaks at the company's healthcare summit on Tuesday, May 15, 2007 in New York. (AP Photo/Mark Lennihan)   (Associated Press)
General Electric chairman and chief executive Jeffrey Immelt speaks to the media prior to addressing shareholders at the annual meeting in Greenville, S.C., Wednesday, April 25, 2007. Immelt says the company expects to sell its plastics unit in the second or third quarter this year, divesting itself of a...
General Electric chairman and chief executive Jeffrey Immelt speaks to the media prior to addressing shareholders at the annual meeting in Greenville, S.C., Wednesday, April 25, 2007. Immelt says the...   (Associated Press)
(FILES) Picture dated 27 May 2005 shows US giant General Electric...
(FILES) Picture dated 27 May 2005 shows US giant General Electric...   (Getty Images (by Event))
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Saudi Arabia • plastic • takeovers • Saudi Basic Industries Corp. • General Electric • merger • acquisition • Sabic • Basell • GE Plastics

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