Saudi Aramco has purchased 2.1 billion shares, (or 70%) of Saudi Basic Industries Corp (SABIC) for 259 billion riyals ($69.1 billion) in four special transactions. The price per share was 123 riyals ($32.8).

Saudi Aramco said: “The deal completion is on-track with expectations to be finalised before the end of the second quarter. All necessary pre-closing regulatory clearances have been obtained. We will make a completion announcement in due course.”

Saudi Aramco closed 0.31% down on the Saudi Stock Exchange (Tadawul) at market close, while SABIC closed 0.56% down, following the news. The market’s headline index, the TASI, closed 0.2% down.

The oil giant signed a deal last year with Saudi Arabia’s sovereign wealth fund, the Public Investment Fund (PIF), to take the majority shareholding in the petrochemicals company.

The payment for SABIC, the world’s fourth-largest petrochemicals firm, will be funded in part by four bonds issued by Aramco to the PIF.

Aramco indicated that 36% of the purchase price – which could be adjusted for certain expenses – will be paid in cash, while 64% will be paid in the form of a seller loan. Therefore, the proceeds to the PIF in the form of cash will amount to $500 million, and the five additional bonds will be worth $2.5 billion.

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15th June 2020