Outlining further plans for cooperation between SABIC and Clariant after the Saudi petchems giant completes its acquisition of a nearly 25% stake in the Swiss specialty chemicals producer, the two companies have signed a Memorandum of Understanding (MoU) to create a new stand-alone High Performance Materials business within Clariant.

The process of creating this “exceptional global platform for organic and inorganic growth” is anticipated to be completed before the end of 2019 and close at the beginning of 2020, subject to regulatory approvals. It foresees the merger of SABIC’s Specialties business – including the Ultem (polyetherimide, PEI) and Noryl (polyphenylene ether, PPE ) resins acquired in the  2007 takeover of GE Plastics and its families of LNP compounds and copolymers – with Clariant’s additives and high-end masterbatch portfolio.

In a statement, the companies said the move would make Clariant a “uniquely positioned and competitively advantaged provider of customer-specific high-performance materials and solutions in the specialty chemicals industry, headquartered in Switzerland and listed on the SIX Swiss Exchange”. SABIC stressed again that it “currently has no plans to launch or otherwise effect a full takeover” of the Swiss player.

Yousef Al-Benyan, vice chairman and CEO of SABIC, said the two existing Specialties platforms are complementary. SABIC’s investment in Clariant and the intended combination of portions of the respective specialty businesses are “well aligned with the strategy to open new growth opportunities in specialty chemicals,” he commented.

Uncoupling the Specialties business will allow the Performance unit to achieve accelerated organic and inorganic growth as aligned with SABIC’s broader corporate strategy of creating a sizeable, world class Specialties company,” Al-Benyan added, remarking that the two sides “will seek to further develop this strategic relationship at the highest levels of both companies.”