Saudi Aramco completes acquisition of 70% stake in SABIC

RIYADH: Saudi Aramco on Wednesday said it has completed a $ 70.1 billion acquisition in chemical giant SABIC for $ 69.1 billion, making it one of the world’s largest producers.

The stake was with the Public Investment Fund (PIF), the state’s sovereign wealth fund, allegedly for buying bets in international companies.

“The completion of the transaction increases Aramco’s presence in the global petrochemicals industry,” Aramco said in a statement.

“In 2019, Aramco and SABIC recorded petrochemicals production volume of around 90 million tonnes,” the company said.

Six months after Aramco sealed the world’s largest initial public offering, a 1.7% of its shares were sold for $ 6.6 billion upon completion of the purchase.

Last year, the energy giant raised $ 12 billion in a bond sale to help pay for the SABIC acquisition.

Aramco president Yasir al-Rumayan, who headed the Saudi Wealth Fund, said the SABIC deal served both sides.

“It provides capital for the PIF’s long-term investment strategy as it advances Saudi Arabia’s economic transformation and development, benefiting the people of our country,” said Rumayan.

“It supports Aramco’s continued growth in downstream and enhances its international footprint.”

The government last month made a $ 40 billion transfer to PIF from foreign reserves managed by the Saudi Central Bank to support its liquidity.

In the first quarter of this year, it bought a $ 7.7 billion stake in hosting companies ranging from Boeing, Walt Disney and Starbucks to Marriott and Citigroup.

SABIC’s stock price has fallen by more than 27% since the announcement of the deal early last year.

The company reported losses in the fourth quarter of last year and the first quarter of this year at lower prices.

The PIF, which aims to expand its hold to $ 2 trillion by 2030, is seen as the main driving force behind Crown Prince Mohammed bin Salman’s Vision 2030 economic diversification plan.

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