Saudi Aramco, the world's biggest oil exporter, completed a deal reached last year with the country's Public Investment Fund (PIF) to buy a 70% stake in the chemical manufacturer, Saudi Basic Industries Corp. (SABIC) for around $70 billion, the company announced in a statement on Wednesday.
The oil producer will pay in installments between August 2020 and April 2028, with the first payment of $7 billion due to PIF on Aug. 2.
The transfer of SABIC shares to Saudi Aramco is seen as an important cash injection tool for the Public Investment Fund.
The company said the transaction would enhance its presence in the global petrochemicals industry, a sector expected to record the fastest growth in the years ahead, considering that in 2019 Aramco and SABIC recorded petrochemicals production volume of nearly 90 million metric tons.
"The acquisition of the SABIC stake is consistent with Aramco's long-term downstream strategy to grow its integrated refining and petrochemicals capacity and create value from integration across the hydrocarbon chain," the company said.
SABIC's shares were traded at $32 per share in the Saudi Stock Market Tadawul after the announcement of the agreement between Saudi Aramco and PIF in March 2019 but fell to $23.83 on June 16, 2020, recording a 25.5% fall.
By Busranur Begcecanli