Saudi Arabia’s sovereign wealth fund is set to create a new steel giant with the acquisition of the metals unit of chemicals maker Saudi Basic Industries Corp. for an enterprise value of 12.5 billion riyals ($3.3 billion).

The Public Investment Fund will acquire Saudi Iron & Steel Company from Sabic, as the chemicals firm is known. In a separate deal, Hadeed, Sabic’s steel unit, will acquire AlRajhi Steel Industries Co. in exchange for stock, according to a statement. The deal is expected to close before the end of the first quarter of 2024.

The accord is the latest sign of the Saudi wealth fund’s growing influence over the Arab world’s largest economy. The PIF is responsible for most of the country’s projects intended to help diversify away from its reliance on oil sales, including developing an auto-manufacturing hub, tourism projects and building vast new cities.

“These transactions will bring together PIF’s financial capabilities and industry experience with Hadeed and Rajhi Steel’s leading technical and commercial expertise, to create a national champion in Saudi Arabia’s steel sector,” said Yazeed Al-Humied, the PIF’s deputy governor and head of Middle East and North Africa investments.