The completion of the transaction is subject to customary closing conditions, including Saudi Arabian and certain other antitrust approvals. The acquisition will expand SIG's global presence and enhance its medium and long term growth outlook.
The transaction is a continuation of SIG's strategy for expanding its global footprint by entering new geographies. SIG Combibloc Obeikan supplies customers in MEA from a full-scale manufacturing plant in Riyadh, Saudi Arabia, which will be fully integrated into SIG's global production network.
Abdallah Al Obeikan, CEO of OIG and currently CEO of SIG Combibloc Obeikan, will be nominated for election to SIG's board of directors at the next annual general meeting, subject to completion of the acquisition prior to the AGM, and other customary conditions. Abdelghany Eladib, currently chief operating officer of SIG Combibloc Obeikan, will join SIG's Group executive board as president & general manager, Middle East & Africa, subject to and as of completion of the acquisition.
Rolf Stangl, CEO of SIG, said, "I am very pleased to see this culmination of the strong relationship we have had with OIG over the years. This is a unique opportunity to acquire a high -uality asset which we know very well. SIG Combibloc Obeikan is a leading player in meeting the growing demand for aseptic cartons in MEA and will be an additional driver of growth in our portfolio. Acquiring full ownership of the joint venture demonstrates our strong commitment to further expanding the business in the Middle East and Africa."
SIG Combibloc Obeikan, the 50:50 joint venture between SIG and OIG formed in 2001, provides SIG filling systems to customers in the MEA region in 17 countries. Its offering consists of SIG filling machines, aseptic carton sleeves and closures, accompanied by technical support and service.
In the 12 months ending September 30, 2020, SIG Combibloc Obeikan generated revenue of approximately €290m and EBITDA of approximately €80m. Over the last 15 years, the JV has grown revenues at a CAGR of 14% and EBITDA at a CAGR of 24%.
The transaction will be funded through a combination of newly issued SIG shares (from authorized share capital) and available cash balances and credit facilities. OIG will receive around 17.5m SIG shares, equivalent to a stake of approximately 5% of SIG's share capital on a pro-forma fully diluted basis, and a cash consideration of €167m for its 50% stake in SIG Combibloc Obeikan. The transaction is expected to be accretive to SIG's free cash flow and earnings per share from 2021.