Saudi Aramco buys SABIC shares on market, completes planned acquisition

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Saudi Aramco buys SABIC shares on market, completes planned acquisition

The Kingdom of Saudi Arabia’s state-backed oil giant, Aramco, the world’s most profitable company on an unaudited basis, had purchased 2.1 billion shares of SABIC or Saudi Basic Industries, a state-backed multinational chemical manufacturing company, in the Saudi stock market on Sunday, completing its planned acquisition agreed last year to buy out 70 per cent stakes of the Saudi Petrochemical giant, market data and sources familiar with the subject-matter had unveiled.

Aside from that, according to the Saudi stock exchange Tadawul data, four separate transactions were conducted in order to purchase 2.1 billion shares of SABIC and roughly £55 billion worth of SABIC shares were purchased on Sunday, though Tadawul did not disclose the names of the buyers.

In tandem, the SABIC shares had been sold by the Saudi Sovereign investment fund, widely known as the PIF or Public Investment fund, while the funds raised by the SABIC stake sales to Saudi Aramco would be invested in a gauge of Government programs as envisioned by the Saudi Crown Prince Mohammed bin Salman, said the PIF officials.

In concomitance, at least four sources familiar with the issue had affirmed that the transactions had been a part of the acquisition of SABIC agreed last year, which in effect would likely to create the world’s largest petrochemical giant, said industry sources.

Aramco acquires SABIC on previously agreed price despite a slump in market valuation

Meanwhile, although a press agency was quoted Aramco sources as saying last month the Aramco officials were looking to a potential reform of the SABIC takeover deal, as SABIC had lost over 40 per cent of its market valuation since the deal was agreed, Sunday’s transaction had confirmed that the deal price had not been changed, though it remained unclear on whether there had been a restructuring on making payments.

Besides, Sunday’s all-stock takeover of SABIC by purchasing 70 per cent of its stake in the Tadawul, had involved cross transactions or so-called special deals under which a transaction could be executed at an agreed price between the buyer and seller.

Apart from that, while being asked about the transactions, Aramco said in a statement late on the day, “The deal completion is on-track with expectations to be finalised before the end of the second quarter. We will make a completion announcement in due course.