Aramco Buys Sabic Stake for $70bn

State-owned Saudi Aramco signed a $69.1bn share agreement with the government to buy its 70% majority stake in Saudi petrochemical giant Sabic from the Public Investment Fund of Saudi Arabia, it said March 27. The other 30% is held by the private sector and Saudi Aramco said it has no plans to acquire these remaining shares.

The transaction is subject to certain closing conditions, including regulatory approvals.

Sabic produced 75mn metric tons of petrochemicals worth $45bn in 2018. Its total assets stood at about $85bn as of last December, according to its 2018 financial report.

Aramco senior vice president of downstream Abdulaziz Al-Judaimi said that the giant oil company plans to expand downstream: “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 4.9mn to 8-10mn b/d by 2030, of which 2-3mn b/d will be converted into petrochemical products.”

Sabic’s share value increased 0.65% on the purchase and opened trading March 28 at 1.77% up on the day.