Aramco-Sabic deal receives clearance from the European Commission

The world's largest oil exporting company acquired a 70 per cent stake in Sabic last year

FILE PHOTO: A man walks past the headquarters of Saudi Basic Industries Corp (SABIC) in Riyadh, Saudi Arabia October 27, 2013. REUTERS/Faisal Al Nasser/File Photo
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Saudi Aramco's acquisition of a majority stake in Sabic, the region's largest petrochemical company, has received unconditional clearance from the European Commission.

"With this, the proposed acquisition has now received unconditional clearance in all jurisdictions in which pre-notification antitrust filings are required," Sabic said in a note to the Tadawul exchange, where its shares trade.

The closing of the transaction is subject to pending customary conditions mentioned in its share purchase agreement, the note added.

Saudi Aramco, the world's largest oil-exporting company, acquired 70 per cent of Sabic in a $69.1 billion (Dh253.8bn) deal last year, as part of the company's efforts to diversify into the downstream business and generate more revenue from the sale of products. Saudi Aramco plans to raise its refining capacity to 8-10 million barrels per day by 2030 — of which 2-3 million bpd will be converted into petrochemical products — up from 4.9 million bpd.

Sabic, the largest non-oil industrial company in the kingdom, has four main business units focusing on petrochemicals, specialities, agri-nutrients and metals.

The chemicals company reported a loss in the fourth quarter of 2019 on the back of declining revenue due to lower selling prices of its products as well as impairment charges on one of its affiliate businesses.

The company reported a net loss of 720 million Saudi riyals (Dh705m) for the three months to the end of December, compared to a profit of 3.22 billion riyals recorded in the fourth quarter of 2018.