At the end of last week Aramco confirmed that it was working on a possible purchase of a strategic stake in Saudi Basic Industries Corp (SABIC) from the sovereign fund of the Kingdom of Public Investment Fund (PIF).
Initially, Aramco decided to acquire all 70% of SABIC shares owned by PIF, sources told Reuters. If this is not possible, Aramco can buy a stake of more than 50% in the petrochemical company, becoming its majority shareholder.
The final decision on the amount of the acquired stake is not accepted, since the negotiations are still at a very early stage, the interlocutors of the agency specified.
The market capitalization of SABIC, the fourth largest petrochemical company in the world, is SAR 385.2 billion ($ 103 billion).
Aramco seeks to increase investment in refining and petrochemicals. The oil giant plans to increase its processing capacity to 8-10 million barrels per day from about 5 million bpd at present and double the production of petrochemicals by 2030.
The potential acquisition of a stake in SABIC will affect the timing of the planned IPO of Saudi Aramco, said CEO of the oil company Amin Nasser in a television interview on Friday.
Saudi Aramco plans to sell up to 5% of the shares during the IPO, which is expected to become the largest in history.
The share placement is part of Visions-2030, the plan of Crown Prince Mohammed bin Salman to diversify the economy, create the world’s largest sovereign investment fund and reduce dependence on hydrocarbons. Riyadh expects to raise a record $ 100 billion within the IPO.
source: reuters.com
