Saudi Aramco is set to acquire a 50 percent stake in synthetic-rubber maker Arlanxeo after buying it from its partner, Germany’s Lanxess in a deal worth 1.4 billion euros in cash.
“The proposed purchase underscores Saudi Aramco’s strategy to further diversify our downstream portfolio and strengthen our capabilities across the entire petroleum and chemicals value chain,” Aramco’s Senior Vice President of Downstream, Abdulaziz al-Judaimi said in a statement on Wednesday.
For Lanxess chief executive Matthias Zachert the sale will allow him to focus on more deals to strengthen its specialty chemicals activities. Lanxess has previously said it would keep the remaining half of Arlanxeo until at least 2021.
The German chemicals group expects to receive about 1.4 billion euros in cash from the deal, which is expected to complete by end of 2018, valuing all of Arlanxeo at 3.0 billion euros including debt and liabilities.
Aramco plans to boost investments in refining and petrochemicals to secure new markets and sees growth in chemicals as central to cut the risk of an oil demand slowdown.
