Sabic Lifts Clariant Stake Close to Threshold Triggering Bid

(Bloomberg) --

Saudi Basic Industries Corp. increased its stake in Clariant AG, signaling cooling relations between the two companies hasn't dulled the Saudi petrochemical maker's aim to expand in specialty products through the Swiss firm.

The state-owned plastics company now owns 31.5% in Muttenz-based Clariant, it said in a filing. That's up from 24.99% previously and just short of the one-third ownership that would trigger a mandatory offer for the remainder. Shares of Clariant surged.

The move is part of “Sabic's growth strategy in specialties” and furthers its aim of becoming a global leader, it said in statement, without giving further details. Completion of the transaction is subject to regulatory approvals, Sabic said.

Spokespeople for Sabic weren't immediately available for comment.

Sabic acquired its Clariant stake from an activist investor in 2018, seeing the purchase as a way to expand in higher-margin products used in cosmetics, catalysts and biofuel. Since then, the Saudi company has been unable to agree with Clariant Chairman Hariolf Kottmann on how to deepen the bond between the two companies, Bloomberg News reported last year.

Plans for a high-performance plastics joint venture also fell apart. Kottmann took back interim operational control of Clariant last year after the surprise departure of the company's chief executive officer, who had been installed by Sabic.

The Saudi company's increase in its stake sends a clear signal to Kottmann that it's not backing away from the investment and has aspirations to be more than just a silent partner. Uncertainty over relations between Sabic and Clariant has helped put the Swiss company's future as an independent company in doubt, according to Baader Bank.

Shares of Clariant jumped 6.9% to 21.54 francs as of 4:06 p.m. in Zurich. The stock is little changed over the past year, valuing the chemicalmaker at 7.1 billion francs ($7.4 billion).

To contact the reporter on this story: Andrew Noël in London at anoel@bloomberg.net

To contact the editors responsible for this story: Anthony Palazzo at apalazzo@bloomberg.net, Ben Scent

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