Middle Eastern energy firm Saudi Aramco has confirmed that it "is engaged in very early-stage discussions" about buying a strategic interest in global plastics and petrochemicals maker Saudi Basic Industries Corp.
Officials with Saudi Aramco in Dhahran, Saudi Arabia, released a statement July 19 because of media speculation on the possible acquisition. In the statement, they said Saudi Aramco is evaluating several local and global acquisition opportunities, including Sabic.
They added that these evaluations are "consistent with the company's strategy of rebalancing its portfolio by moving further into downstream and the petrochemical sector." Officials said that any acquisition would be a private transaction and wouldn't involve acquiring public shares of Sabic, which is based in Riyadh, Saudi Arabia, with North American headquarters in Houston.
Globally, Sabic is a major supplier of polyethylene, polycarbonate and other commodity and engineering resins. The firm — majority owned by the Saudi government — employs more than 34,000 and posted sales of almost $40 billion in 2017.
Saudi Aramco is Saudi Arabia's state-owned oil company and is one of the world's largest oil producers. Earlier this year, the firm announced major downstream petrochemicals investments in Saudi Arabia and India. Saudi Aramco also has an initial public offering of its stock scheduled for 2019.