Saudi Aramco confirms interest in Sabic stake

19 July 2018
The Saudi energy giant said it is eyeing Sabic’s publicly traded shares

Saudi Aramco has confirmed in a statement its interest in seeking to acquire a stake in petrochemicals producer Saudi Basic Industries Corporation (Sabic).

Aramco said it is engaged in preliminary discussions with Riyadh’s sovereign wealth body, the Public Investment Fund (PIF), the majority 70 per cent owner of Sabic, about acquiring “a strategic interest” in Sabic “by way of a private transaction”.

In its statement, Aramco also said it does not intend to acquire any of the 30 per cent shares of Sabic that are traded on the Riyadh Stock Exchange.

It added that there is no guarantee of the transaction being conducted.

The development was first reported by Reuters on 18 July.

The move is thought to be Aramco’s strategy to enhance its downstream portfolio, and therefore leading to a higher valuation ahead of its planned stock listing.

Aramco and Sabic are already working on a plan to jointly build a crude oil-to-chemicals complex at the existing downstream facility in Yanbu, a megaproject estimated to be worth between $20bn to $25bn.

Below is the full statement as posted on Aramco’s website:

"Saudi Aramco has noticed media speculation regarding its possible interest in acquiring an ownership position in the Saudi Basic Industries Corporation (SABIC).

"Consistent with the company’s strategy of rebalancing its portfolio by moving further into downstream and the petrochemical sector in particular, the company has been evaluating a number of acquisition opportunities, both local and global. Saudi Aramco confirms that it is engaged in very early-stage discussions with the Public Investment Fund (PIF) regarding acquiring a strategic interest in SABIC by way of a private transaction. These discussions are preliminary and there is no certainty that any such transaction will take place. Saudi Aramco has no plans to acquire any publicly held shares of SABIC.

"If further announcements are appropriate, they will be made in compliance with applicable regulations."

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