Saudis buy major supplier to U.S. military
WASHINGTON — Saudi Arabia has acquired a Massachusetts firm that is a leading supplier to the U.S. military.
The state-owned Saudi Basic Industries Corp. has purchased GE Plastics from General Electric for $11.6 billion. Based in Pittsfield, Mass., GE Plastics, with 11,000 employees, develops and manufactures plastic polymers, composites and polycarbonates used in U.S. military platforms, including fighter-jets, submarines and engines.
"SABIC's intention is to grow globally," SABIC chief executive officer Mohamed Al Mady said.
In May 2007, SABIC announced the acquisition of GE Plastics, regarded as the largest transaction ever completed in the United States by a Gulf Cooperation Council state, Middle East Newsline reported. Seventy percent of SABIC, which employees 17,000 people, is owned by the Saudi government, with Middle East investors accounting for the rest of the company.
SABIC, established in 1976, bested the U.S.-based Apollo Management and the Dutch firm Bassell for the acquisition of GE Plastics. The Saudi company offered $11.6 billion for GE Plastics.
The purchase of GE Plastics must be approved by the Committee on Foreign Investments in the U.S, aligned with the Treasury Department. In March 2006, CFIUS enabled the purchase of Britain's Peninsular and Oriental Steam Navigation Co., which operates the six major U.S. ports, by the United Arab Emirates.
Congress protested the sale of P&O on grounds of national security, and the UAE's Dubai Ports World backed out of the deal. DP World, however, succeeded in its bid to acquire Britain's Doncasters Group Ltd., a manufacturer of precision aircraft engine parts for the U.S. military.
Executives said GE Plastics maintains contracts with the U.S. Defense Department, Homeland Security Department and the National Aeronautics and Space Administration, or NASA. Congress has not raised objections to the SABIC purchase.