Saudi Aramco has signed an agreement to buy a 70 per cent stake in petrochemicals giant Saudi Basic Industries Corp (Sabic) for $70bn (£53bn), the company said today.
The state oil firm has secured the purchase from Saudi Arabia’s sovereign wealth fund, the Public Investment Fund (PIF), for an agreed price of 123.40 riyals per share, just below its last closing price.
The deal follows months of talks between PIF and Aramco, which have added to the delay of the oil company’s planned $2tn initial public offering.
Yousef Al-Benyan, Sabic vice chairman and chief executive, 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.”
The move is a significant step in Aramco’s efforts to move into petrochemicals as a new market for its crude oil. It also provides further funding for the sovereign wealth fund as the kingdom looks to diversify its income.
Aramco said it does not plan to buy the remaining shares in Sabic.