Saudi Aramco has revealed that it has completed its acquisition of a 70 percent stake in Saudi Basic Industries Corporation (SABIC) from the Public Investment Fund (PIF) for a total price of $69.1 billion (SAR 259.125 billion).
The completion of the transaction enhances Saudi Aramco’s presence in the global petrochemicals industry, the company said, adding that it was a sector expected to record the fastest growth in oil demand in the years ahead.
Saudi Aramco noted that its latest purchase is consistent with its long-term downstream strategy to “grow its integrated refining and petrochemicals capacity and create value from integration across the hydrocarbon chain”.
Combined, in 2019 Aramco and SABIC recorded petrochemicals production of nearly 90 million tons, including agri-nutrient and specialty products.
As the new majority shareholder of SABIC, Aramco has the ability to elect the majority of SABIC’s directors. A Corporate Collaboration and Integration Committee has already been established to make recommendations on collaboration and integration. This committee will be chaired by the SABIC CEO and will include two other members from SABIC and three members from Aramco.
“We are excited to complete this transaction. It is a significant leap forward which accelerates Aramco’s downstream strategy and transforms our company into one of the major global petrochemicals players,” Saudi Aramco President and CEO Amin Nasser said in a company statement.
“Despite the Covid-19 pandemic forcing many companies to rethink or revise their long-term strategies, our long-term focus, financial strength and resilience have enabled us to complete this historic deal,” he added.
“It marks the beginning of a new chapter in the history of both companies and is an important marker in delivering our long-term downstream strategy,” he continued.
Commenting on the deal, Yousef A. Al-Benyan, the vice chairman and CEO of SABIC, said, “the global scale and presence of SABIC, one of the world’s most significant diversified chemicals companies, brings significant enhancements to Aramco”.
“As the chemicals growth platform, SABIC expects to benefit from the additional scale, technology, investment potential, and growth opportunities Aramco will bring in integrated energy and chemicals production,” he added.
In March last year, Saudi Aramco announced the signing of a share purchase agreement to acquire a 70 percent majority stake in SABIC. At the time, Saudi Aramco said it had no plans to acquire the remaining shares of the company.
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