Aramco has successfully completed its share acquisition of a 70 percent stake in Saudi Basic Industries Corporation (Sabic) from the Public Investment Fund (PIF), the sovereign wealth fund of Saudi Arabia. The total purchase price was $ 69.1 billion, equating to $33 price per share.
The deal enhances Aramco’s presence in the global petrochemicals industry, transforming Aramco into one of the major global petrochemicals players. It also advances its chemicals strategy among others by integrating upstream production with Sabic feedstock and expanding the capabilities in procurement, supply chain, manufacturing, marketing and sales, the company said in a statement announcing the deal.
The transaction is expected to "create opportunities for selective integration synergies that support growth and add value for shareholders," said Amin Nasser, President and CEO of Aramco.
The company sees further advantages regarding the complementary geographic presence, projects and partners of the two companies and increased resilience of cash flow generation.
"As the chemicals growth platform, Sabic also expects to benefit from the additional scale, technology, investment potential, and growth opportunities Aramco will bring in integrated energy and chemicals production," said Yousef A. Al-Benyan, vice chairman and CEO of Sabic.
As the new majority shareholder of SABIC, Aramco has the power to elect the majority of Sabic’s directors. The Sabic board will ensure strategic alignment, and oversee further creation of value for Sabic and all of its shareholders as Sabic becomes an important member of the Aramco group.
A Corporate Collaboration and Integration Committee has also been established to make recommendations on collaboration and integration matters expected to create value for Sabic in particular and for the Aramco group as a whole. This committee will be chaired by the CEO of Sabic and will include two members from Sabic and three from Aramco.