SABIC has reached agreement on the US$700 million acquisition of the Huntsman European base chemicals and polymers business.

Mohamed Al-Mady, Vice Chairman and CEO of Saudi Basic Industries Corporation (SABIC) and Peter Huntsman, President and CEO of Huntsman Corporation today announced they have agreed terms under which SABIC will acquire 100 per cent of the shares of Huntsman Petrochemicals (UK) (the Huntsman European Base Chemicals and Polymers business) for a purchase price of US$700 million in cash. After the completion of the deal, SABIC intends to complete the construction of the 400kpta capacity polyethylene (LDPE) plant in Wilton, Teeside at an investment cost of US$150 million. The acquisition marks a significant step in the SABIC global growth plans.

The Huntsman business adds substantial capacity to SABIC Europe and complements their strong home base in the Kingdom of Saudi Arabia.

On completion of the deal, all 830 Huntsman Petrochemicals (UK) employees will transfer to SABIC under the same employment conditions.

SABIC is the largest public company in the Middle East, ranked by market capitalisation (more than US$100 billion), and one of the world's 10 largest petrochemicals manufacturers.

The company is among the world's market leaders in the production of polyethylene, polypropylene, glycols, methanol, MTBE and fertilisers, as well as the fourth largest polymer producer.

The acquired manufacturing business operates a 865 ktpa ethylene/ 400 ktpa propylene cracker and 1.3 million tpa Aromatics facilities with elaborate logistical facilities at Wilton and North Tees.

The 400 ktpa LDPE plant, which is in the early stages of construction, is scheduled to come on stream by the end of 2007.

Commenting on the acquisition, Mr Al-Mady said, 'The acquisition of the Huntsman UK/European business is a major addition to the Sabic Europe group of companies and to the SABIC business overall.

This deal demonstrates our commitment to growing the SABIC business and the success of our globalisation strategy.

We have achieved substantial growth in Europe in recent years, following the successful integration of the DSM petrochemical business in 2002.

The businesses we are acquiring at Wilton and North Tees add additional talented employees and offer further high quality production platforms to achieve our next stage of growth, and will add to our other sites in Europe - in Geleen, Holland and Gelsenkirchen, Germany.

We are fully committed to realizing the full potential of these businesses and therefore we intend to invest and grow the business in the future, including the continued construction of the new polyethylene plant'.