Sabic denies merger with Aramco unit

22 May 2016

Companies say the media reports suggesting a possible merger are inaccurate

Riyadh-listed petrochemicals firm Saudi Basic Industries Corporation (Sabic) has said it has no plans to merge with a petrochemicals unit of state oil major Saudi Aramco.

The company has not conducted any study for combining businesses, Sabic said in a statement to the Saudi Stock Exchange (Tadawul), where its shares are traded. 

“The companies wish to clarify that they have no plans to pursue this option,” said Aramco and Sabic in a separate joint statement, after media reports suggested the companies are mulling the merger option.

“Both companies will continue to explore mutually beneficial opportunities to work together as partners and contribute to the continued growth and diversification of the kingdom’s economy.”

State-controlled Saudi Aramco, which is at the heart of kingdom’s economic transformation plans, is preparing to present options for its part-privatisation to the Saudi Arabia’s Supreme Council, its chief executive Amin Nasser told reporters on 10 May. The options include floating less than 5 per cent of shares on the Tadawul, and a dual listing on a major foreign market.

The Supreme Council is led by Deputy Crown Prince Mohammed bin Salman al-Saud, who first announced the initial public offering (IPO) in early 2016.

Aramco is offering strategic stakes to global oil majors and plans to work closely with them on major projects and technology. Aramco is also planning a global expansion through joint ventures and Nasser has identified the US, India, Indonesia, Vietnam and China as potential targets.

Aramco’s future plans also include a joint venture with Sabic to build a $30bn oil to chemicals project.

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