US-based chemical company Huntsman Corporation has signed a definitive agreement with Saudi Arabian Basic Industries Corporation (SABIC), under which SABIC will acquire Huntsman's European Base Chemicals and Polymers business.

SABIC will acquire the business for a purchase price of $700 million in cash, subject to certain adjustments at closing. The transaction further allows Huntsman to reduce its UK pension liabilities by approximately $126 million. The transaction will not include Huntsman's Teesside-based Pigments division or the Wilton-based aniline and nitrobenzene operations of its Polyurethanes division.

After giving effect to the announced divestiture and the recently completed sale of Huntsman's US butadiene and MTBE business, total revenue from Huntsman's differentiated businesses (including the Textile Effects division recently acquired from Ciba), will equate to nearly 80% of Huntsman's revenues for the twelve month period ending June 30. Total net debt, on a pro forma basis for the same period, is expected to drop to approximately $3.5 billion after application of the proceeds from the announced divestiture—more than a 40% reduction from approximately $6 billion in net debt at the end of 2004.

Huntsman manufactures for a variety of industries including chemicals, plastics, automotive, textiles and footwear.