Saudi Basic Industries Corporation (SABIC)[2010.SE] has announced that it plans to conduct a feasibility study for a sale of its stake in Ibn Al-Baytar National Chemical fertilizer Company to Saudi Arabian fertilizers Company (SAFCO)[2020.SE]. It is worth noting that Ibn Al-Baytar is 50/50 owned by SABIC and SAFCO. It is also worth mentioning that SAFCO is 42.9% owned by SABIC. We believe that this move comes as SABIC is in the process of restructuring its operations in an attempt to streamline each of its business segment. For SAFCO, while we believe that its balance sheet could easily finance the acquisition of Ibn Al-Baytar, we believe that it could pose some downside to 2016 dividends; especially as earnings are expected to be considerably weaker in 2016 (-35% Y-o-Y EFGe). As of December 2015, SAFCO's 50% holding in Ibn Al Baytar's represented an equity balance of SAR609 million. Overall, we believe this move would be neutral to SABIC given its size, but negative for SAFCO as it i) reduces its cash balance; ii) increases exposure to nitrogen fertiliser space, which is under severe pressure; and iii) increases the risk of dividends being cut in 2016. (Tadawul, Ahmed Hazem Maher)   SABIC: SAR76.45 as of 10 March 2016, Rating: Buy, FV: SAR85.00 per share, MCap: USD61,160 million, SABIC AB / 2010.SE SAFCO: SAR71.93 as of 10 March 2016, Rating: Sell, FV: SAR57.50 per share, MCap: USD7,992 million, SAFCO AB / 2020.SE