Saudi Aramco completed its $69 billion acquisition of a 70% stake in SABIC

 
Sinopec News Network, June 16, 2020 - Aramco has completed the acquisition of 2.1 billion shares (70%) of Saudi Basic Industries (SABIC), according to Russian oil and Gas network on June 15.
 
The deal is part of four deals on the Saudi Tadawul Exchange. The total value of the deal was 259.125 billion riyals, or $69.1 billion ($32.8 per share). The stake is being sold by Saudi Arabia's sovereign wealth fund (PIF), which still controls the remaining 30 per cent of SABIC.
 
The acquisition, announced in March 2019, is expected to be one of the largest mergers and acquisitions in the global oil and gas industry. For more than a year, however, the market has changed dramatically, with SABIC losing more than 40 per cent of its value amid the collapse of the oil market. According to Reuters, Aramco is considering restructuring the deal in May 2020. However, the transaction price has apparently not changed, but it is not clear whether the structure of payment in PIF has been modified. To secure the deal, Aramco attracted $10 billion in loans in 2020.
 
SABIC is the fourth largest petrochemical company in the world. The 70 percent acquisition of SABICis is in line with Aramco's long-term strategy to spur growth by increasing its refining capacity from 4.9 million BPD to 8-10 million BPD by 2030. Of the planned 8-10 million BPD of oil, 2-3 million BPD will be used in petrochemical production.
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