State oil giant Saudi Aramco signed a share purchase agreement to acquire a 70 percent majority stake in Saudi Basic Industries Corp (SABIC) from the Public Investment Fund (PIF), it said in a statement on Wednesday.
The private transaction was signed for SAR 259.125 billion, or SAR 123.39 per share, which is equivalent to $69.1 billion, the statement said.
The remaining 30 percent publicly traded shares in SABIC are not part of the transaction, and Saudi Aramco has no plans to acquire these remaining shares, it further added.
The transaction is subject to certain closing conditions, including regulatory approvals.
“This transaction is a major step in accelerating Saudi Aramco’s transformative downstream growth strategy of integrated refining and petrochemicals,” Amin Nasser, President and CEO, Saudi Aramco said.
“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,” he continued.
“This agreement will introduce a strategic owner that can add considerable value to SABIC and all its shareholders, while capitalizing on its strong capabilities to unlock the opportunities for growth that Saudi Aramco, a key player in energy markets around the world, can offer,” Yasir Othman Al-Rumayyan, managing director of PIF, said.
The acquisition is in line with Saudi 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 (bpd) by 2030, out of which 2-3 million bpd will be converted into petrochemical products.
#Saudi_Aramco is acquiring a 70% stake in @SABIC, the Saudi Arabian Basic Industries Corporation, creating new opportunities in fast-growing petrochemicals pic.twitter.com/EETRoJMqxO
— aramco | أرامكو (@Saudi_Aramco) March 27, 2019
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