Saudi Aramco announced Wednesday it acquired a 70 percent stake in Saudi Basic Industries Corp (SABIC), in a deal worth USD69.1 billion.
Saudi Minister of Energy, Industry, and Mineral Resources Khaled al-Faleh congratulated the Public Investment Fund (PIF) and Aramco for this deal for it will bring an inclusive transformation.
"Saudi Aramco announced the signing of a share purchase agreement to acquire a 70% majority stake in Saudi Basic Industries Corporation (SABIC) from the Public Investment Fund of Saudi Arabia, in a private transaction for... USD69.1 billion," Aramco said in a statement.
Headquartered in Riyadh, SABIC has global operations in over 50 countries with 33,000 employees.
In 2018, SABIC’s consolidated production volume across its various business units was 75 million metric tons and recorded net income of USD5.7 billion, annual sales of USD45 billion, and total assets of USD85 billion.
Yousef al-Benyan, SABIC Vice Chairman and CEO, said: “I believe the potential rewards of this deal are clear and support our vision to be the preferred world leader in chemicals.”
“SABIC will benefit from the additional scale, technology, investment potential, and growth opportunities Saudi Aramco will bring as a global leader in integrated energy and chemicals production while remaining focused on meeting the needs of our customers and the creation of value for all our shareholders,” added Benyan.
“SABIC’s relationship with Saudi Aramco goes back to our inception in 1976. Solidifying our relationship in this way strategically positions SABIC and Saudi Aramco to accelerate exciting developments in our global chemicals business,” he continued.
Amin Nasser, President & CEO of Aramco said: “This transaction is a major step in accelerating Saudi Aramco’s transformative downstream growth strategy of integrated refining and petrochemicals.”
“SABIC is a world-class company with an outstanding workforce and chemicals capabilities. As part of the Saudi Aramco family of companies, together we will create a stronger, more robust business to enhance competitiveness and help meet rising demand for energy and chemicals products needed by our customers around the world,” added Nasser.
Abdulaziz al-Judaimi, Senior Vice President of Downstream of Aramco said: “Saudi Aramco’s downstream strategy is focused on meeting global customer needs by securing outlets for our crude oil through the expansion and growth of our refining system and deepening its integration with petrochemicals production.”
Judaimi added that “we are pursuing partnerships and acquisitions where we create long-term value and developing groundbreaking crude-oil-to-chemicals technologies. SABIC is a good strategic fit and a solid platform to support our continued investment for future growth in petrochemicals – the fastest growing sector of oil demand.”
The acquisition is in line with Aramco’s long-term strategy to drive growth through an enhanced downstream portfolio by increasing global participated refining capacity from 4.9 million to 8-10 million barrels per day by 2030, of which 2-3 million barrels per day will be converted into petrochemical products. This Downstream portfolio will consume significant quantities of Arabian crude oil.
