Saudi Aramco confirms its interest in acquiring Sabic

Saudi Aramco, said to be the world’s largest oil company, has confirmed that it is considering buying what it calls “a strategic interest” in chemical producer Saudi Basic Industries Corp. (Sabic), a deal that – if it occurs – could be worth up to US$70 billion.

As reported by both the Reuters and Bloomberg new agencies, Saudi Amamco is lining up banks to raise money to acquire as much as 70 per cent of Sabic.

And now, in a July 24 statement, Saudi Aramco confirmed that at least some of the speculation is true. “Consistent with the company’s strategy of rebalancing its portfolio by moving further into downstream and the petrochemical sector in particular, the company has been evaluating a number of acquisition opportunities, both local and global,” the statement said. “Saudi Aramco confirms that it is engaged in very early-stage discussions with the Public Investment Fund (PIF) regarding acquiring a strategic interest in Sabic by way of a private transaction. These discussions are preliminary and there is no certainty that any such transaction will take place. Saudi Aramco has no plans to acquire any publicly held shares of Sabic.”

According to Reuters, JPMorgan and Morgan Stanley have been picked by Saudi Aramco to advise on its plan to buy a controlling stake in Sabic.