Saudi Aramco's 70 per cent stake in Sabic is being financed by the Public Investment Fund of Saudi Arabia in a private transaction.
March 28, 2019 by Canadian Plastics
In what’s being described as one of the biggest deals in the global chemical industry, the world’s largest oil producer Saudi Aramco is buying a 70 per cent stake in Saudi Basic Industries Corp. (Sabic) for US$69.1 billion
The shares are being purchased from the Public Investment Fund (PIF) of Saudi Arabia, which is the Saudi kingdom’s wealth fund, in a private transaction.
Aramco said it has no plans to buy the remaining shares in Sabic, which is the world’s fourth-biggest petrochemicals firm and Saudi Arabia’s largest publicly listed company.
The transaction is subject to certain closing conditions, including regulatory approvals.
“This is a win-win-win transaction and a transformational deal for three of Saudi Arabia’s most important economic entities,” PIF managing director Yasir al-Rumayyan said in a statement. “It will unlock significant capital for PIF’s continued long-term investment strategy, underpinning sectoral and revenue diversification for Saudi Arabia.”
“Sabic is a good strategic fit and a solid platform to support our continued investment for future growth in petrochemicals,” said Abdulaziz Al-Judaimi, senior vice president, downstream, for Saudi Aramco. “[Aramco] is pursuing partnerships and acquisitions to we create long-term value, and develop ground-breaking crude-oil-to-chemicals technologies.”
Formed in 1976 and headquartered in Riyadh, Sabic produces such key chemicals for plastics manufacturing as polyethylene, polypropylene, and ethylene glycol.