Saudi Aramco, the world’s top oil producer, is buying a 70 percent stake in Saudi Basic Industries Corp (SABIC) from the Kingdom’s sovereign wealth fund for $69.1 billion.
The deal comes after months of negotiations between Aramco and Saudi Arabia’s Public Investment Fund (PIF).
SABIC, headquartered in Riyadh, operates businesses in more than 50 countries and employs 33,000 people. In 2018, the company’s total production in its various business units reached 75 million metric tons, with a net income of $5.7 billion, annual sales of $45 billion, and total assets of $85 billion.
According to the Supervisor of the PIF, Yasser Bin Othman al-Rumayan, the transaction is beneficial for all parties and is considered a “qualitative leap forward” for three of the most important economic institutions in the Kingdom, adding that the deal “will contribute to the diversification of sectors and sources of income in the Kingdom.”
CEO of Saudi Aramco, Amin Hassan Al Nasser, believes this acquisition is a quantum leap to push Saudi Aramco’s growth strategy in refining and petrochemicals.
“SABIC is a global company with excellent capabilities both in its workforce and in the petrochemical sector. As part of the Saudi Aramco Group, we will work together to create a stronger platform to enhance competitiveness and meet the growing demand for energy and chemical products our customers need worldwide,” he said.
The deal comes in line with Saudi Aramco's long-term strategy to accelerate growth through developing and strengthening its refining and chemical portfolio.
The strategy aims to increase Aramco’s total share of global refining capacity from 4.9 million to 8 million barrels per day (bpd) by 2030, while converting 2 to 3 million bpd to petrochemical products.