Saudi Aramco to buy controlling share of Sabic in $69 billion megadeal

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.