Saudi Aramco has signed a MoU with the US multinational Dow Chemical Company that aims to set forth a process for Dow to acquire an additional 15 per cent ownership interest from Saudi Aramco in Sadara Chemical Company, a joint venture of the two companies
Presently, Saudi Aramco holds 65 per cent of share in Sadara, with Dow holding the remaining 35 per cent. With the proposed agreement, Dow and Saudi Aramco will each hold 50 per cent equity stake in Sadara.
Andrew Liveris, chairman and CEO of Dow, said that Sadara focuses on delivering market-driven solutions to support the diversification of the country’s economy. He added, “Increasing our equity stake in this iconic joint venture is a powerful example of our strategic partnership with Saudi Aramco and is yet another accelerator in Dow’s long-term growth strategy designed to capture growing consumer-led demand in our key end-markets of transportation, infrastructure, packaging and consumer products in developing regions.”
Commenting on the MoU, Amin H Nasser, president and CEO of Saudi Aramco, said, “Dow’s larger stake in Sadara is an endorsement of the Kingdom’s vibrant ecosystem and signals Dow’s confidence in our partnership as a model of mutually beneficial foreign direct investment.”
“The time is right to fully leverage Dow’s global leadership to further contribute to the Kingdom’s economic transformation in line with Vision 2030,” Nasser stressed.
The potential equity equalisation is subjected to occur after the two events that include the intended separation of the Materials Science Company, within 18 months after the close of the merger of equals between Dow and DuPont on August 31 2017, and Sadara’s completion of the creditors’ reliability test, which is part of the limited-recourse financing used to fund the Sadara project development.
Aramco said that the financial structure and governance of Sadara will remain unchanged.
The Sadara chemical complex is said to be the largest of its kind ever built in a single phase, currently operating all of its 26 world-scale units that manufacture a portfolio of valued-added performance plastics and specialty chemicals.
