While the size of the stake is yet unknown, what is certain is that it wants a majority stake in SABIC.
As per two sources familiar with the matter at hand, Saudi Arabia’s Aramco aims to purchase a controlling stake in SABIC, which could be as much as 70% – the entire stake owned by Saudi Arabia’s sovereign wealth fund.
Last week, Aramco IPO-ARMO.SE confirmed that it was working on a possible purchase of a “strategic stake” in Saudi Basic Industries Corp (SABIC) from the Public Investment Fund, the kingdom’s top sovereign wealth fund.
According to sources, Aramco’s plan A is to buy Public Investment Fund’s (PIF) entire stake, but if that fails, its fallback plan is put purchase a stake of at least more than 50%, thus making it the majority owner. However, a final decision on the size of the stake is still undecided.
While PIF did not respond to a request for comment, Aramco declined to comment.
Incidentally, SABIC is the world’s fourth-biggest petrochemicals firm and has a market capitalization of ($103 billion) 385.2 billion Saudi riyals.
In an interview on Friday, Amin Nasser, Aramco’s CEO said in a TV interview that the potential acquisition of a stake is likely to affect the time frame of Aramco’s planned initial public offering (IPO) set for later this year.
For Aramco growth in chemicals is seen as central to its downstream strategy to cut the risk of a slowdown in demand for oil.
It plans on raising its refining capacity to between 8 million and 10 million barrels per day, up from 5 million bpd, and double its petrochemicals production by 2030.
Aramco is the world’s largest oil producer and pumps nearly 10 million bpd of crude oil.