SABIC acquisition central to Aramco’s diversification plan: Nasser

Talks to acquire a majority stake in SABIC are at an "early stage" but the proposed acquisition of the petrochemicals major is “central to Saudi Aramco's plans to diversify its revenue stream,” Financial Times reported, citing Aramco CEO Amin Nasser.

The SABIC deal will help accelerate Aramco’s plans to develop its chemicals operations and prepare for tighter constraints on greenhouse gas emissions, he noted.

“SABIC has a strong market position, [and is] vertically integrated: there’s a lot of synergy with Saudi Aramco,” Nasser said, adding, “It’s a very strategically [good] fit with what we are aspiring to be, which is [to be] deeper in the downstream sector.”

Negotiations over the price have not yet begun, as due diligence is still ongoing, the CEO said.

In July, Aramco confirmed it was in talks with the Public Investment Fund, the Kingdom’s sovereign wealth fund, over the acquisition of a potential stake in SABIC.

Separately, Nasser said the Saudi government was still committed to a stock market flotation for Saudi Aramco, but that the initial public offering (IPO) would have to wait until after the acquisition and integration of SABIC, which would “take some time.”