Saudi Aramco mentioned on Wednesday it has accomplished the acquisition of a 70% stake in chemical large SABIC for $69.1 billion, boosting it as one of many world’s largest producers.
The stake was held by the Public Investment Fund (PIF), the dominion’s sovereign wealth fund which has reportedly been on a spree to buy stakes in worldwide companies.
“The completion of the transaction enhances Aramco’s presence in the worldwide petrochemicals trade,” Aramco mentioned in an announcement.
“Combined, in 2019 Aramco and SABIC recorded petrochemicals manufacturing quantity of practically 90 million tons,” one of many world’s largest, the corporate mentioned.
Completion of the acquisition comes six months after Aramco sealed the world’s largest preliminary public providing, promoting 1.7% of its shares for a document $29.four billion.
Last 12 months, the vitality large raised $12 billion in a bond sale to assist pay for the SABIC acquisition.
Aramco chairman Yasir al-Rumayyan, who additionally chairs the Saudi wealth fund, mentioned the SABIC deal served each events.
“It supplies capital for PIF’s long-term funding technique because it drives the financial transformation and development of Saudi Arabia, additional benefiting the individuals of our nation,” Rumayyan mentioned.
“It helps Aramco’s continued development in downstream and enhances its worldwide footprint.”
The authorities final month transferred $40 billion to PIF from the overseas reserves managed by the Saudi central financial institution to assist its liquidity.
In the primary quarter of this 12 months, it purchased $7.7 billion holdings in a number of corporations – from Boeing, Walt Disney and Starbucks to Marriott and Citigroup.
SABIC’s share value has fallen by greater than 27% because the deal was introduced early final 12 months. The firm posted losses in each the fourth quarter of final 12 months and first quarter of this 12 months over low costs.
PIF, which goals to boost its holdings to $2 trillion by 2030, is seen as the principle driving drive behind Crown Prince Mohammed bin Salman’s Vision 2030 financial diversification plan.