Riyadh - Mubasher: Saudi Basic Industries Corporation (SABIC) announced on Tuesday that it has signed an agreement with the Japan Saudi Arabia Methanol Company (JSMC) to buy 50% of the company's shares in Arrazi for $150 million.

This accounts for 25% of all Arrazi shares to make SABIC and JSMC shareholding 75% and 25% respectively in Arrazi.

It is worth mentioning that the current joint venture expires on 29 November 2018 and SABIC which gives the right for SABIC to buy JSMC’s share in Arrazi which is 50%, the company said in a statement to the Saudi Stock Exchange (Tadawul).

The deal is also an extension of the partnership with the JSMC in Arrazi for 20 years with 25% ownership, as JSMC shall pay to SABIC $1.35 billion for the extension of the term of the joint venture (JV).

SABIC will also use some or all of the above proceeds to finance the refurbishment of or replacement of Arrazi’s existing methanol plants.

SABIC will become an equal co-owner in a new more efficient methanol production technology to be commercialized.

The statment noted that as per the terms and conditions of the agreement, the Japan Saudi Arabia Methanol Company (JSMC) has the right at any time prior to 31 March 2019, to sell its remaining 25% shares in Arrazi to SABIC for a value of $150 million.