Clariant, SABIC Shelve JV Talks

FILE PHOTO: The logo of Swiss specialty chemicals company Clariant is seen at the company's headquarters in Pratteln, Switzerland August 9, 2017. REUTERS/Arnd Wiegmann/File Photo
FILE PHOTO: The logo of Swiss specialty chemicals company Clariant is seen at the company's headquarters in Pratteln, Switzerland August 9, 2017. REUTERS/Arnd Wiegmann/File Photo
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Clariant, SABIC Shelve JV Talks

FILE PHOTO: The logo of Swiss specialty chemicals company Clariant is seen at the company's headquarters in Pratteln, Switzerland August 9, 2017. REUTERS/Arnd Wiegmann/File Photo
FILE PHOTO: The logo of Swiss specialty chemicals company Clariant is seen at the company's headquarters in Pratteln, Switzerland August 9, 2017. REUTERS/Arnd Wiegmann/File Photo

Clariant said on Thursday that joint venture talks with top shareholder Saudi Basic Industries (SABIC) had been shelved, a further setback for the Swiss chemicals maker whose CEO abruptly quit this week.

Shares in Clariant plunged 11 percent as the company also announced a first-half loss.

Clariant and SABIC, which has a 25 percent stake in the Swiss group, had been working to combine Clariant's additives and specialty masterbatches businesses - including colors, additives and special effect concentrates for plastics used for products such as packaging - with parts of SABIC's specialty chemicals operation.

Even before the JV flopped, Clariant had been in upheaval, announcing on Wednesday that CEO Ernesto Occhiello, who joined just 10 months ago, was resigning with immediate effect.

Clariant said it would now look to sell its specialty masterbatches business along with standard masterbatches that were already on the auction block.

"What a mess!" Baader Helvea chemicals analyst Markus Mayer said in a note, adding he sees Clariant increasingly as a takeover target.

"SABIC has an interest to fully take over Clariant. With the resignation of CEO Occhiello, who came from SABIC, and the termination of the JV negotiations, we think it is just a matter of time SABIC will come up with a takeover offer."

With a market capitalization of $88 billion, SABIC is 13 times bigger than $6.66 billion Clariant.

SABIC said it "looks forward to continuing the discussions with Clariant once conditions improve".

Saudi oil giant Aramco this year reached an agreement with the state-run Public Investment Fund to buy its controlling stake in SABIC for $69.1 billion.

Mazen al-Sudairi, head of research at Al Rajhi Capital, said market conditions might be a factor for the shelving of the JV, as petrochemical prices are down globally and have hurt sector results.

"Whenever there are any concerns or changes related to the economic cycle, M&A should be put on hold," he said, adding SABIC learned that lesson when its $8 billion acquisition of a unit of GE in 2007 was followed by the subprime mortgage crisis.

SABIC bought its stake in Clariant in 2018, arriving on the scene as a white knight to end the Swiss company's fight with activist investors who had previously blocked the Swiss company's proposed $20 billion merger with US-based Huntsman Corp.

Clariant on Thursday reported a first-half net loss of 101 million Swiss francs versus a profit of 211 million a year earlier. Sales were steady at 2.2 billion francs.

The results were affected by a 231 million franc provision Clariant set aside for an ongoing competition law investigation by the European Commission.



New Chapter for Saudi Real Estate Market as Foreign Ownership Allowed

Residential and commercial properties in Riyadh – Asharq Al-Awsat
Residential and commercial properties in Riyadh – Asharq Al-Awsat
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New Chapter for Saudi Real Estate Market as Foreign Ownership Allowed

Residential and commercial properties in Riyadh – Asharq Al-Awsat
Residential and commercial properties in Riyadh – Asharq Al-Awsat

Saudi Arabia has approved a new law allowing non-Saudis to own real estate across the Kingdom, a move officials say will stimulate foreign investment, increase the quality and availability of housing stock, and help bring balance to the property market.

The decision, announced by the Council of Ministers on Tuesday, marks a shift in the structure of the real estate sector and aligns with the Kingdom’s broader strategy to diversify investment and improve urban development under its Vision 2030 reform agenda.

Municipal and Rural Affairs and Housing Minister Majid Al-Hogail said the new framework is expected to attract foreign developers and investors, increase competition in the domestic market, and ultimately help stabilize prices while improving housing options for Saudi citizens.

“A Strategic Restructuring”

“This step will encourage real estate supply and raise the quality of developments,” Al-Hogail said in a statement. “It supports the economic momentum and investment movement we are witnessing under Vision 2030.”

Khalid Al-Jasser, head of Amaken Group and a real estate specialist, said the updated system prioritizes Saudi citizens’ interests and will include mechanisms to regulate the market and achieve planned targets—chief among them, property market balance.

He added that the move would introduce global real estate standards to the Kingdom and draw capital to improve housing infrastructure, while creating jobs and lowering property prices.

“This is more than just an investment measure—it’s a structural shift,” Al-Jasser said.

Focus on Mega Projects and New Cities

Khaled Almobid, CEO of Menassat Realty Co., said the measure would allow foreign investors to buy properties in major development zones such as NEOM and the Red Sea Project—areas central to Crown Prince Mohammed bin Salman’s economic diversification efforts.

Almobid said the law is intended to protect Saudi homebuyers from being priced out of the market, while enabling high-value foreign investment that brings hard currency and supports large-scale development.

“The focus will be on strategic areas,” he said. “We expect foreign ownership will be restricted in districts designated for Saudi housing, with safeguards against speculation.”

He noted that details would become clearer once executive regulations are released.

Riyadh Housing Reforms

The foreign ownership law follows a series of housing reforms launched in March by Crown Prince Mohammed, aimed at curbing soaring land and rental prices in Riyadh.

As part of the measures, the government lifted bans on land sales, divisions, and permits, and instructed the Royal Commission for Riyadh City to develop 10,000 to 40,000 new residential plots annually over the next five years - priced at no more than 1,500 riyals ($400) per square meter - for eligible citizens.

Eligibility is limited to married Saudis or individuals over 25 years old with no prior property ownership.

The government also pledged to amend regulations governing undeveloped land fees and tenant-landlord relations within 60 to 90 days to boost supply and protect all parties’ rights.

The Real Estate General Authority and the Royal Commission were also tasked with monitoring Riyadh property prices and submitting regular reports.