Saudi Aramco has announced the signing of a share purchase agreement to acquire a 70% majority stake in Saudi Basic Industries Corporation (SABIC) from the Public Investment Fund of Saudi Arabia, in a private transaction for SAR 259.125 billion (or SAR 123.39 per share), which is equivalent to US$69.1 billion. The remaining 30% publicly traded shares in SABIC are not part of the transaction, and Saudi Aramco has no plans to acquire these remaining shares. The transaction is subject to certain closing conditions, including regulatory approvals.
Headquartered in Riyadh, Saudi Arabia, SABIC has global operations in over 50 countries with 34 000 employees. In 2018, SABIC’s consolidated production volume across its various business units was 75 million t, and recorded net income of US$5.7 billion, annual sales of US$45 billion, and total assets of US$85 billion.
Yasir Othman Al-Rumayyan, Managing Director, Public Investment Fund of Saudi Arabia said: “This is a win-win-win transaction and a transformational deal for three of Saudi Arabia’s most important economic entities. It will unlock significant capital for PIF’s continued long-term investment strategy, underpinning sectoral and revenue diversification for Saudi Arabia. Furthermore, it will introduce a strategic owner that can add considerable value to SABIC and all its shareholders, while capitalizing on SABIC’s strong capabilities to unlock the opportunities for growth that Saudi Aramco, a key player in energy markets around the world, can offer.”
The acquisition is in line with Saudi Aramco’s long-term strategy to drive growth through an enhanced Downstream portfolio by increasing global participated refining capacity from 4.9 million to 8 – 10 million bpd by 2030, of which 2 – 3 million bpd will be converted into petrochemical products. This Downstream portfolio will consume significant quantities of Arabian crude oil.
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