PIF buys Hadeed from SABIC

In a strategic move aimed at reshaping the landscape of Saudi Arabia’s steel sector, the Public Investment Fund (PIF) announced on Sunday the successful conclusion of a share purchase agreement that grants it full ownership of the Saudi Iron & Steel Co., commonly known as Hadeed. This significant acquisition, valued at SR12.5 billion ($3.33 billion), solidifies PIF’s commitment to enhancing the nation’s industrial prowess and steel production capacity.

Under the terms of a cross-conditional share exchange agreement, Hadeed reciprocally acquires complete ownership of AlRajhi Steel Industries Co., also known as Rajhi Steel, from Mohammed Abdulaziz AlRajhi & Sons Investment Co., colloquially referred to as Rajhi Invest. The consideration for this exchange comprises newly issued shares in Hadeed, as detailed in the official PIF statement.

Hadeed, renowned for its expertise in manufacturing steel products such as reinforcing bars, coiled wire, billets, as well as slabs, sections, and hot and cold rolled coil, will undoubtedly emerge as a dominant force within the Gulf Cooperation Council region’s iron and steel sector, propelled by the infusion of capital and strategic direction from the PIF.

Yazeed A. Al-Humied, the Deputy Governor and Head of Middle East and North Africa Investments at PIF, emphasised the pivotal role the steel industry plays in Saudi Arabia’s economic diversification and growth. “These transactions will synergise PIF’s financial acumen and industry acuity with Hadeed and Rajhi Steel’s preeminent technical and commercial proficiency, thus birthing a national champion in Saudi Arabia’s steel arena,” he declared.

Moreover, Al-Humied highlighted the alignment of these deals with PIF’s mandate to cultivate new strategic partnerships that foster private sector participation in the Kingdom’s economic expansion.

SABIC CEO Abdulrahman Al-Fageeh praised Hadeed’s historical contributions to the construction and development sectors in Saudi Arabia, underscoring its pivotal role in SABIC’s own success and growth. Al-Fageeh stated, “The sale of Hadeed will enable SABIC to refocus on its strategy to become the global leader in the chemicals industry.”

The transaction marks a turning point in the steel industry landscape of the Kingdom, with Hadeed poised to elevate its regional prominence and capacity. Yazid Mohamed Al-Rajhi, Chairman of Rajhi Invest, expressed enthusiasm about leveraging the combined capabilities and expertise of PIF, Hadeed, and Rajhi Invest to meet the evolving demands of Hadeed’s customers.

As PIF cements its position as a driving force behind Saudi Arabia’s industrial renaissance, this acquisition sets the stage for a dynamic and competitive future in the nation’s steel sector, underpinned by a commitment to excellence and strategic growth.