RIYADH  - Saudi Basic Industries Corp (SABIC) said on Thursday it has agreed to sell its agri-nutrients business to Saudi Arabia Fertilizers Co (SAFCO), in which it owns a 43% stake.

SAFCO will finance the acquisition by issuing 59.4 million shares, valued at 10 riyals each, to SABIC, raising the fertilizer group's overall share capital by 14.25% to 4.76 billion riyals ($1.27 bln).

"The deal is a clear strategic attempt to create a national champion and a global leader in agrinutrients," SABIC Chief Executive Yousef al-Benyan told reporters in a virtual press conference.

SABIC had been seeking to consolidate its various holdings in companies specializing in agri-nutrient, or fertilizer, production, and signed a preliminary deal with SAFCO to divest the resulting combined business in Nov. 2018.

After the acquisition the business will take the name SABIC Agri-nutrient Investments.

The deal would allow SABIC to focus on its expansion in petrochemical products, and SAFCO to become more specialised in fertilisers and phosphate.

SABIC, the world's fourth-largest chemicals company, which is 70% owned by oil giant Saudi Aramco, is looking to divest businesses seen as non-core.

"The new company will become the investment arm for SABIC on agribusiness and will create more synergies on assets," Benyan said.

(Reporting by Marwa Rashad; Editing by Jan Harvey) ((marwa.rashad@thomsonreuters.com; +966558880260; Reuters Messaging: marwa.rashad.thomsonreuters.com@reuters.net))