Aramco announced the successful completion of its share acquisition of a 70 % stake in Saudi Basic Industries Corporation (Sabic) from the Public Investment Fund (PIF), the sovereign wealth fund of Saudi Arabia, for a total purchase price of 69.1 billion US$. The completion of the transaction enhances Aramco’s presence in the global petrochemicals industry, a sector expected to record the fastest growth in oil demand in the years ahead. Combined, in 2019 Aramco and Sabic recorded petrochemicals production volume of nearly 90 million tonnes, including agri-nutrient and specialty products.
The acquisition of the Sabic stake is consistent with Aramco’s long-term downstream strategy to grow its integrated refining and petrochemicals capacity and create value from integration across the hydrocarbon chain. It specifically enhances Aramco’s chemicals strategy by transforming Aramco into one of the major global petrochemicals players; integrating upstream production with SABIC feedstock; expanding capabilities in procurement, supply chain, manufacturing, marketing and sales; complementing geographic presence, projects and partners; and increasing the resilience of cash flow generation with synergistic opportunities. SABIC expects also to benefit from Aramco’s Downstream chemicals feedstock production, and ability to invest in and execute major growth projects at a very large scale.
Amin Nasser, President & CEO, Aramco said: “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. 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.”
As the new majority shareholder of Sabic, Aramco has the ability to elect the majority of Sabic’s directors. The Sabic board will ensure strategic alignment, and oversee further creation of value.