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Oil company Saudi Aramco has completed the acquisition of a 70 per cent stake in Saudi Basic Industries Corporation (SABIC) from the Public Investment Fund (PIF), Saudi Arabia's sovereign wealth fund

34489493966 d67a5a8621 cSaudi Aramco has the ability to elect the majority of SABIC’s directors. (Image source: worldsteel/Flickr)

The oil company stated that the total purchase price is worth US$69.1bn.

The acquisition of the SABIC stake is consistent with the long-term downstream strategy of Saudi Aramco to increase its integrated capacity for refining and petrochemicals and create value from integration across the hydrocarbon chain. It specifically improves Saudi Aramco’s strategy on chemicals by transforming.

Yasir Othman Al-Rumayyan, governor, Public Investment Fund (PIF), said, “This is a significant milestone for three of Saudi Arabia’s most important entities. It provides capital for PIF’s long-term investment strategy as it drives the economic transformation and growth of  Saudi Arabia, further benefitting the people of our country; it supports Aramco’s continued growth in downstream and enhances its international footprint; and, it provides SABIC a new strategic energy industry focused shareholder with the ability to support growth projects.”

Amin Nasser, president and CEO, Saudi Aramco, said, “The strategic integration of our upstream production and downstream chemicals feedstock production with SABIC’s chemicals platform is expected to create opportunities for selective integration synergies that support growth and add value for shareholders.”

“Despite the COVID-19 pandemic forcing many companies to rethink or revise their long term strategies, our long-term focus, financial strength and resilience have enabled us to complete this historic deal. It marks the beginning of a new chapter in the history of both companies and is an important marker in delivering our long term downstream strategy.”

As the new majority shareholder of SABIC, Saudi Aramco has the ability to elect the majority of SABIC’s directors. The SABIC board will ensure strategic alignment, and oversee further creation of value for SABIC and all of its shareholders as SABIC becomes an important member of the Aramco group.