Saudi Public Investment Fund buys SABIC shares worth $69.1 billion
Aramco has 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, equating to $32.9 price per share.
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 and expanding capabilities in procurement, supply chain, manufacturing, marketing and sales.
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.
H.E. Yasir Othman Al-Rumayyan, Governor, Public Investment Fund (PIF) said: “This is a significant milestone for three of Saudi Arabia’s most important entities. It provides capital for PIF’s long-term investment strategy as it drives the economic transformation and growth of Saudi Arabia, further benefitting the people of our country.
"It also supports Aramco’s continued growth in Downstream and enhances its international footprint and, it provides SABIC a new strategic energy industry focused shareholder with the ability to support growth projects.”
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.
A Corporate Collaboration and Integration Committee has also been established to make recommendations on collaboration and integration matters expected to create value for SABIC in particular and for the Aramco group as a whole.
This committee will be chaired by the SABIC CEO and will include two other members from SABIC and three members from Aramco.