RIYADH: Germany’s Knauf International plans to acquire full ownership of Saudi-based United Mining Industries through a cash offer of about SR293.5 million ($78 million) for the remaining publicly held shares. The transaction could lead to United Mining Industries being delisted from the Nomu Parallel Market.
This step follows Knauf’s acquisition of a controlling 63.2 percent stake in United Mining Industries in May for SR504.5 million. Consequently, the total outlay for the German firm to acquire 100 percent of the Saudi company would reach approximately SR798 million.
The offer holds particular significance in the Saudi market; analyst Abdulaziz Khuraiss noted on X, formerly Twitter, that the deal represents a “market first.” It involves a foreign strategic investor, having already purchased the stakes of major shareholders, moving to acquire the remaining shares and delist the company entirely.
$78 m to purchase remaining shares
Knauf has offered to buy the remaining 5.15 million shares in United Mining Industries at SR57 each, valuing the offer at about SR293.5 million if all shareholders accept. The offer price matches the SR57 per share that Knauf paid in May to acquire 8.85 million shares from former major shareholders Al Mojel Trading & Contracting Co., Abdul Qadir Al Muhaidib & Sons Co. and Rashid Development Co. Ltd.
The offer price represents a 26.7 percent premium over the share price prior to the announcement of the private transaction and is about 2.7 percent higher than the closing price of SR55.50 recorded on Sept. 24.
According to Khuraiss, the current phase completes the acquisition process that began with the purchase of the major shareholders’ stakes; Knauf is now seeking to acquire publicly held shares at the same price of SR57, aiming for full ownership of the company subject to regulatory approvals and acceptance of the offer.
The company’s stock fell 0.9 percent to SR55 during mid-session trading on Sept. 27.
United Mining Industries was established in Jeddah in December 2006 as a closed joint-stock company, with a current capital of SR140 million distributed across 14 million shares. Its shares were listed on the Saudi parallel market (Nomu) in 2023, prior to Knauf acquiring a majority stake in May.
Knauf International GmbH is a German limited liability company with a capital of €62 million ($70 million), headquartered in Iphofen, Germany.
Why is Knauf betting on United Mining Industries?
The significance of the deal extends beyond acquiring a stake in a listed company. “Al-Muttahida” gives Knauf an established manufacturing base in Saudi Arabia, including production assets, sales channels and an existing brand, as well as a new gypsum board production line.
Knauf views the acquisition as an opportunity to leverage its expertise in manufacturing, research and development, and sales, while also creating prospects for increasing production capacity and expanding from the Saudi market into regional markets.
The offer acceptance period began on Sep. 27 and runs until Nov. 4; share deposits and payments to shareholders are scheduled for Nov. 18, with the completion of the acquisition expected to be announced on Nov. 19.
Ongoing mining acquisitions
Financial analyst Assem Mansour anticipates continued acquisition activity across both the main and parallel markets, noting that the pace of these transactions will depend on the speed of legislative and regulatory developments.
He said the mining sector is driven by strategic and structural factors that set it apart from sectors such as banking and energy, and described Knauf’s acquisition of United Mining as part of this broader trend. He added that the Kingdom’s mining sector is poised for significant growth, with opportunities estimated at trillions of dollars, which could spur further acquisitions of companies linked to the metals industry.
