Saudi Aramco, the world’s largest oil-exporting company, completed the acquisition of 70 per cent of shares in Sabic, the region’s biggest petrochemicals firm.
Aramco announced last year its purchase of the stake worth $69.1 billion (Dh253bn) from the kingdom's sovereign Public Investment Fund. The share purchase deal works out at 123.39 riyals per share.
The transaction will provide capital for the PIF’s "long-term investment strategy” as it drives economic growth and transformation in the kingdom, the fund's governor Yasir Al Rumayyan said in a statement.
“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,” he added.
Aramco’s acquisition is in line with its long-term strategy to drive growth through an enhanced downstream portfolio by increasing global refining capacity from 4.9 million to 8 million-to-10 million barrels per day by 2030, of which 2m bpd to 3m bpd will be converted into petrochemical products. This downstream portfolio will consume significant quantities of Saudi Arabia's crude oil.
Aramco and Sabic registered 90 million tonnes of petrochemicals production, including agri-nutrient and specialty products in 2019, the companies said.
PIF, which has about $300bn in assets under management, is involved in the economic diversification process and plans to boost its international investments to help raise assets to $2 trillion by 2030.
PIF is tasked with enabling the creation of new sectors and opportunities that will shape the future global economy, while driving the economic transformation of Saudi Arabia.
Working alongside its global strategic partners and investment managers, PIF acts as the kingdom’s main investment arm to deliver a strategy focused on achieving attractive financial returns and long-term value for Saudi Arabia, in line with Vision 2030.
The transaction was a "significant leap forward” for Saudi Aramco’s downstream strategy, the company’s president and chief executive, Amin Nasser said.
The deal will place the company in the league of one of the world’s major petrochemicals players, he added.
“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," Mr Nasser said.