Knauf Deepens Saudi Ties with Landmark UMI Majority Stake Deal

RIYADH, Saudi Arabia – January 22, 2026 – German building materials titan Knauf Group has announced a landmark deal to acquire a 63.2% majority stake in United Mining Industries Company (UMI), a leading Saudi-based manufacturer. The move, which includes a stated intention to eventually acquire up to 100% of UMI, signals a significant deepening of Knauf’s 30-year presence in the Middle East and a powerful vote of confidence in Saudi Arabia's economic future.

This strategic acquisition is poised to create a new powerhouse in the region's burgeoning construction sector, combining Knauf's global expertise and innovation with UMI's robust local manufacturing base and market penetration. The transaction is not merely a corporate merger but a direct alignment with the Kingdom's ambitious Vision 2030, positioning the combined entity as a key supplier for the giga-projects transforming the nation.

A Strategic Blueprint for Vision 2030

At its core, the acquisition is a strategic play to capitalize on and contribute to Saudi Arabia's Vision 2030. The Kingdom's diversification plan has unlocked a torrent of construction activity, with mega-projects like NEOM, the Red Sea Project, and Qiddiya creating unprecedented demand for high-quality building materials. The government's goal to build one million new residential units further amplifies this need.

Knauf, a family-owned company with 2024 sales of EUR 15.6 billion, views Saudi Arabia as a central pillar of its regional strategy. By partnering with UMI, it gains an immediate and significant industrial footprint. "UMI has a strong industrial base and market presence in Saudi Arabia," said Paul Button, General Manager of Knauf GCC, in the official announcement. "By combining this foundation with Knauf's global manufacturing expertise, innovation capabilities, and technical know-how, we aim to further support the Kingdom's localisation agenda and contribute to the development of a more resilient and competitive construction sector."

This sentiment was echoed by UMI's leadership, which sees the partnership as an engine for growth and a validation of the Kingdom's economic policies. Eng. Raed Al Mudaiheem, Chairman of UMI, stated, "The entry of a global industrial investor of the size of the Knauf Group confirms the attractiveness of the Saudi market to foreign investors and affirms the robustness of the industry in Saudi Arabia, demonstrating the success of Saudi plans in line with the Kingdom's Vision 2030."

Reshaping the GCC's Competitive Landscape

The deal is set to send ripples across the entire Gulf Cooperation Council (GCC) construction market, a sector valued at approximately $400 billion in 2023 and projected to grow steadily. The GCC building materials market alone is forecast to reach USD 56.7 billion by 2034, driven by rapid urbanization and massive infrastructure spending.

The Saudi market is particularly dynamic, valued at USD 53.7 billion in 2024 and projected to climb to USD 84.3 billion by 2033. In this consolidated landscape, major international and regional players like Saint Gobain Group, Kingspan, and SABIC compete for dominance. The Knauf-UMI alliance creates a formidable new competitor, blending German engineering with deep-seated local knowledge.

UMI, a joint venture of prominent Saudi groups Al Muhaidib, Al Mojel, and Al Rashed, is a significant player in plasterboard, fiber cement board, and related products. The market's positive reception to the deal was immediate and clear: UMI's shares, listed on the Nomu-Parallel Market, surged to an all-time high of SAR 52 per share on the day of the announcement, reflecting strong investor confidence in the synergy and future value of the combined enterprise.

Local Roots, Global Innovation, and Sustainability

Beyond market share, the acquisition is a story of technology transfer and sustainable development. UMI has built its business on utilizing locally procured raw materials from its quarry in Yanbu and focusing on efficient, eco-friendly solutions. This local foundation will now be enhanced by Knauf's global commitment to sustainability, encapsulated in its "For A Better World" strategy.

Knauf has set aggressive targets for itself, including achieving zero carbon, delivering a circular economy, and creating better buildings. The company is investing heavily in reducing the embodied carbon of its products and increasing recycled content, with initiatives like a new €15 million facility in Belgium dedicated to recycling mineral wool waste. This focus on circularity and low-impact manufacturing aligns perfectly with the growing demand for green building solutions within Vision 2030's framework, particularly for projects that emphasize environmental stewardship.

The infusion of Knauf's R&D capabilities and advanced materials—from energy-efficient insulation to high-performance gypsum systems—is expected to elevate UMI's product offerings. This will not only benefit the massive giga-projects but also support the broader shift towards more sustainable and energy-efficient construction practices across the Kingdom, contributing directly to Saudi Arabia's environmental goals.

Navigating the Path to Finalization

While the strategic vision is clear, the transaction's completion remains contingent on navigating the regulatory landscape. The deal must secure approvals from Saudi authorities, including the Capital Market Authority (CMA) and the General Authority for Competition (GAC). The GAC is known for its rigorous oversight and has not shied away from imposing conditions or significant fines to ensure fair market practices, highlighting the thorough due diligence the deal will undergo.

Substantial shareholders of UMI, holding the 63.2% stake, have already formally agreed to the sale, providing strong momentum for the acquisition process. Knauf has enlisted Lazard as its financial advisor and AS&H Clifford Chance as legal counsel to steer the transaction through to completion. Once approved, Knauf’s regional leadership will oversee the integration, aiming to ensure a smooth transition that delivers long-term value for employees, customers, and the wider Saudi economy.

With this move, Knauf is not just buying a company; it is investing in a national vision, positioning itself at the very foundation of Saudi Arabia's future development and cementing its role as a pivotal player in the region for decades to come.