Saudi Arabian Oil Company (Saudi Aramco) Announces the Signing of a Deal to Sell an Equity Stake in One of its Newly-Formed Subsidiaries for a Value of USD 15.5 billion (SAR 58.1 billion)
| Element List | Explanation |
|---|---|
| Introduction | Saudi Aramco announces the signing of a share sale and purchase agreement with a consortium led by BlackRock Real Assets and Hassana Investment Company on 06/12/2021G corresponding to 02/05/1443H to sell an equity stake in Aramco Gas Pipelines Company (a recently formed wholly-owned subsidiary of Saudi Aramco) for a value of USD 15.5 billion (SAR 58.1 billion). Saudi Aramco will at all times retain title to, and operational control of, the gas pipeline network. |
| Transaction Details | Saudi Aramco signed a deal to sell 49% of Aramco Gas Pipelines Company to a consortium led by BlackRock Real Assets and Hassana Investment Company for cash consideration of USD 15.5 billion (SAR 58.1 billion). The transaction is expected to close as soon as practicable, subject to customary closing conditions, including any required merger control and related approvals. |
| Transaction Value | USD 15.5 billion (SAR 58.1 billion) |
| Transaction Terms | 1. Immediately prior to completion of the transaction, Saudi Aramco will lease for a 20-year period the usage rights in its gas pipelines network to Aramco Gas Pipelines Company (a recently formed subsidiary of Saudi Aramco).
2. Concurrently, Aramco Gas Pipelines Company will grant Saudi Aramco the exclusive right to use, operate and maintain the gas pipeline network during the 20-year period in exchange for a quarterly tariff payable by Saudi Aramco. The tariff will be backed by a minimum level of gas throughput. Saudi Aramco will at all times retain title to, and operational control of, the gas pipeline network. This transaction will not impose any restrictions on Saudi Aramco’s actual production volumes.
3. Upon closing of the transaction, the purchaser will pay Saudi Aramco USD 15.5 billion (SAR 58.1 billion) for a 49% equity interest in Aramco Gas Pipelines Company.
4. Transaction closing is subject to customary closing conditions, including any required merger control and related approvals. |
| Parties of the Transaction | Saudi Arabian Oil Company (Saudi Aramco) and GEPIF III Finance III Lux S.à r.l. (a consortium led by BlackRock Real Assets and Hassana Investment Company). |
| Transaction Execution Date | 2021-12-06 Corresponding to 1443-05-02 |
| Description of the Business of the Asset forming the Subject Matter of the Transaction | Entering into a “lease and leaseback” transaction with Saudi Aramco in respect of Saudi Aramco’s gas pipeline network for a 20-year period. |
| Asset Book Value | The registered capital of Aramco Gas Pipelines Company is SAR 100,000 (USD 26,667). The anticipated asset book value of Aramco Gas Pipelines Company at closing will be USD 31.6 billion (SAR 118.6 billion). |
| Financial Statements for the Last Three Years of the Asset forming the Subject Matter of the Transaction | Not applicable, as Aramco Gas Pipelines Company is a newly-formed entity and therefore no financial statements are available for the last three years. |
| Transaction reasons | The aim of this deal is to align Saudi Aramco’s existing portfolio of assets with its growth strategy. |
| Expected Impact of the Transaction on the Company and Its Operations | Upon transaction closing, Saudi Aramco will receive USD 15.5 billion (SAR 58.1 billion) in cash, and the purchaser’s stake in Aramco Gas Pipelines Company will be recorded at the same value as a non-controlling interest within equity in Saudi Aramco’s consolidated balance sheet. The transaction is expected to close as soon as practicable, subject to customary closing conditions, including any required merger control and related approvals.
Saudi Aramco will continue to retain full ownership and operational control of its gas pipeline network. |
| Details of Using The Proceeds of the Asset Sale | The proceeds will be used for general corporate purposes. |
| Related Parties | Hassana Investment Company |
| Additional Information | https://www.aramco.com/en/news-media/news/2021/aramco-announces-landmark-gas-pipeline-deal |
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