Saudi Arabian conglomerate Ajlan eyes ‘mega deals’ with Chinese companies in tech, new energy, petrochemical sectors

Ajlan & Bros Holding Group, a private conglomerate headquartered in Riyadh, Saudi Arabia, is targeting “mega deals” reaching over US$1 billion in value with companies in China’s petrochemicals, new energy, and technology sectors in 2024.

The company aims to make strategic investments by acquiring equity stakes, providing financial expertise, and offering legal advice to leading players in these industries, said Vincent Yan, its senior vice-president.

“The objective is to support these companies in expanding their presence in Saudi Arabia and make sure they can adapt to the vast market,” he said in an interview.

Yan said the conglomerate is currently in discussions with top-tier, listed companies in fields that include technology, oil and gas, solar power and electric vehicles. The size of the deals being considered ranges from hundreds of millions of US dollars to over US$1 billion.

Ajlan & Bros plays a crucial role in easing the entry of Chinese companies into Saudi Arabia, helping them align with the kingdom’s Vision 2030 strategy for economic transformation and reducing its dependence on fossil fuels. It has already brought in a dozen Chinese firms from a range of sectors that focus on sustainable business models catering to government, corporate, and individual clients.

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These include electrical equipment maker Chint, gold miner Chifeng, the courier giant SF International and smart pharmacy solutions provider Shanghai General Healthy.

Ajlan, which makes textile products at its factories in China and exports garments to Saudi Arabia, has been in the Chinese market since 2002, when it launched a factory in Suzhou, in the eastern province of Jiangsu . The following year, it set up a new textile plant in Zaozhuang, in Shandong province.

The firm began diversifying its business in China in 2017, with the aim of bringing top Chinese companies to Saudi Arabia.

The conglomerate’s commitment and investment serve as an endorsement of the world’s second-largest economy, which faced challenges in 2022 amid supply-chain disruptions and crippling Covid-19 restrictions, according to Yan. He said Ajlan & Bros is confident in the country’s potential and resilience, as well as the investment potential of China’s established companies.

Sovereign wealth funds in Saudi Arabia and the United Arab Emirates (UAE) are gearing up to invest more in Chinese companies in 2024, as the oil-producing nations seek to diversify their economies and broaden their global investment portfolios amid warming ties between China and the Middle East, according to Deutsche Bank.

State-owned investors in Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the UAE – the six nations that make up the Gulf Cooperation Council (GCC) – invested more than US$2.3 billion in China in 2023, compared with just US$100 million the year before that, according to Global SWF, a database that tracks the world’s sovereign wealth funds. This leap in investment has come amid Beijing’s push to strengthen ties with the Middle East, following Chinese President Xi Jinping’s visit to Riyadh in December 2022.

Chinese companies also see business opportunities in the Mena (Middle East and North Africa) region because of its large population and abundant mineral resources. Ajlan & Bros is currently in advanced talks with several companies and hopes to make announcements in the near future, Yan said.

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