- Saudi Arabia's sovereign wealth fund, the PIF, is poised to establish a significant steel conglomerate by acquiring the metals division of Sabic at an enterprise value of 12.5 billion riyals ($3.3 billion). This acquisition will encompass the purchase of Saudi Iron & Steel Company (Hadeed), a subsidiary of Sabic. “These transactions will bring together PIF’s financial capabilities and industry experience with Hadeed and Rajhi Steel’s leading technical and commercial expertise, to create a national champion in Saudi Arabia’s steel sector,” said Yazeed Al-Humied, the PIF’s deputy governor and head of MENA investments.
- In a separate transaction, Sabic's steel unit, Hadeed, will secure AlRajhi Steel Industries through a stock exchange agreement. The completion of these deals is anticipated before the conclusion of the first quarter in 2024. This development underscores the expanding influence of the Saudi wealth fund, signaling its pivotal role in diversifying the nation's economy away from its oil-centric dependence through initiatives like automotive manufacturing, tourism ventures, and the creation of new urban centers.
Why it matters
The PIF foray into the domestic mining sector aligns with its global expansion efforts. In July of the previous year, PIF entered a joint venture with the Saudi Arabian Mining Company (Ma’aden) to acquire a 10% stake in the basic metals division of Brazil's leading mining firm, Vale, in a transaction valued at $2.6 billion.