Four transactions, completed on Sunday according to Reuters sources and market data, saw Aramco buy a total of 2.1 billion SABIC shares on the Tadawul exchange from the Public Investment Fund (PIF), worth 259,125 billion riyals ($69.1) billion, which makes this deal one of the biggest in the global chemical industry once completed.
Given the ongoing global situation with COVID-19, the global economy has been taking a battering, and this naturally has reflected on SABIC stock value. As such, sources had told Reuters in May that Aramco had been looking to potentially restructure the deal. After all, SABIC shares had fallen around 40% in value. Given this week’s news, however, it seems Aramco decided to go through with the agreed upon price after all. It is unclear whether the structure for making payments to PIF had been revised, however. SABIC shares ended at 88.50 riyals on Sunday.
“The deal completion is on-track with expectations to be finalised before the end of the second quarter,” Aramco told Reuters in a statement when asked about the transactions. “We will make a completion announcement in due course.”
According to sources, Aramco had raised $10 billion in loan this year to facilitate the deal. Additionally, the oil giant held the world’s largest IPO last year, for 1.5% of Saudi Aramco’s total shares, to secure further funding for Kingdom’s economic diversification plans, part of Vision 2030. The oversubscribed IPO ended up raising $25.6 billion.