Saudi Aramco receives unconditional clearance from EU on SABIC purchase

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Saudi Aramco, the Kingdom’s energy giant, has received unconditional clearance from the European Commission for its proposed acquisition of a 70 percent stake in Saudi Basic Industries Corporation (SABIC) from the Public Investment Fund (PIF), a filing on the Saudi Stock Exchange (Tadawul) said.

Earlier this year, the oil giant signed a $69 billion deal with the PIF, Saudi Arabia’s sovereign wealth fund, to take a majority shareholding in the Kingdom’s largest petrochemicals company.

The announcement from the EU means that the deal has now received unconditional clearance in all jurisdictions. Pre-notification antitrust filings are required in several markets prior to a large acquisition such as SABIC.

In November, Aramco said that it was changing the terms of payment related to its acquisition by issuing four bonds to fund a portion of the deal.

Aramco said the seller loan will be secured by four separate bonds, issued by the oil company to Saudi Arabia’s sovereign fund, the Public Investment Fund (PIF).

The company said that 36 percent of the purchase price – which could be adjusted for certain expenses – will be paid in cash, while 64 percent will be paid in the form of a seller loan. Therefore, the proceeds to the fund in the form of cash will amount to $500 million, and the five additional bonds will be worth $2.5 billion.

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