Saudi Aramco acquisition petrochemical maker SABIC - Arhive

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Saudi Aramco exploring acquisition of stake in petrochemical maker SABIC   Saudi Aramco acquisition petrochemical maker SABIC

Source : London (Platts)

Saudi Aramco acquisition petrochemical maker SABICState-owned oil giant Saudi Aramco said Thursday it is considering acquiring a stake in Saudi Arabia’s petrochemical manufacturer Saudi Basic Industries Corporation, or SABIC, as it seeks to boost its downstream presence while it considers a public listing.

In a statement, Aramco said it is “engaged in very early stage discussions” with the Saudi government’s sovereign wealth fund, the Public Investment Fund, to acquire “a strategic interest in SABIC by way of a private transaction.”Saudi Aramco acquisition petrochemical maker SABIC

“These discussions are preliminary and there is no certainty that any such transaction will take place,” Aramco said, adding that any deal would not involve SABIC’s publicly held shares.Saudi Aramco acquisition petrochemical maker SABIC

SABIC is Saudi Arabia’s largest publicly listed company, with the government still holding 70% of its shares and 30% traded on the Saudi stock exchange, the Tadawul.

Aramco has an aggressive plan to boost its downstream footprint to 10 million b/d of throughput over the next few years, up from its current refining capacity of some 5.4 million b/d.Saudi Aramco acquisition petrochemical maker SABIC

To that end, it is aiming to invest $414 billion over 10 years on its downstream sector.

Saudi officials, led by Crown Prince Mohammed bin Salman, have been mooting for the better part of two years a public offering of up to 5% of Aramco, to help fund economic reforms that would reduce the country’s reliance on oil revenues.

The delayed listing could value the company at up to $2 trillion, Saudi Arabia hopes, though analysts say such a lofty valuation may be difficult to achieve.

— Herman Wang, herman.wang@spglobal.com

— Edited by Irene Tang, irene.tang@spglobal.com

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