Saudi Basic Industries Corp (SABIC) said on Thursday it has agreed to sell its agri-nutrients business to Saudi Arabia Fertilizers Co (SAFCO), in which it owns a 43% stake.

SAFCO will finance the acquisition by issuing 59.4 million shares, valued at 10 riyals each, to SABIC, raising the fertilizer group's overall share capital by 14.25% to 4.76 billion riyals ($1.27 bn).

This deal comes as a result of the shared vision by SABIC and SAFCO, to enhance and improve efficiencies through consolidation and realization of synergies. It also envisages considerable opportunities for growth and development of competitive advantages in the global marketplace. It should also be emphasized, that the (SAFCO) company has changed its name to become SABIC Agri-Nutrients Company.

"The deal is a clear strategic attempt to create a national champion and a global leader in agrinutrients," Yousef al-Benyan, Chief Executive, SABIC, quoted as saying.