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Saudi Aramco buys 70% stake in SABIC

Saudi Aramco buys 70% stake in SABIC
Saudi Aramco will buy PIF’s stake in consideration of $69.1 billion
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Riyadh – Mubasher: Saudi Aramco, the world’s largest integrated oil and gas company, has entered into a purchase agreement with the Public Investment Fund of Saudi Arabia (PIF) to acquire its 70% stake in SABIC.

Saudi Aramco will buy PIF’s stake in consideration of $69.1 billion, Aramco’s statement said on Sunday.

After closing SABIC’s transaction, Aramco is expected to be a major petrochemical producer globally by production capacity.

In addition, the Company’s chemicals business will operate in over 50 countries, produce a range of chemicals and is expected to have the largest net production capacity for ethylene and be amongst the top four companies by net production capacity for polyethylene, monoethylene glycol and polypropylene, according to IHS Markit.

Aramco expects the proposed acquisition of SABIC to be transformative to its strategy in chemicals and expand its downstream capabilities in sales, marketing, engineering and technology.

In March, Saudi Aramco entered into a purchase agreement with the PIF to acquire the PIF’s 70% equity interest in SABIC.

On 6 October, both parties agreed to amend the payment terms to provide that, on the closing date, 36% of the purchase price (to be adjusted for certain expenses) will be paid in cash and 64% will be paid in the form of a seller loan.

“The seller loan will be secured by four separate promissory notes issued by Saudi Aramco in favour of the PIF,” the statement highlighted.

In accordance with the terms of the purchase agreement, Saudi Aramco will pay a loan charge to the PIF on the closing date in the form of a cash payment equal to $500 million and the issuance of five additional promissory notes in an aggregate principal amount of $2.5 billion.