Saudi Aramco set to buy majority stake in Sabic

[The SC]

State oil company has been in talks for months to acquire holding in petrochemicals giant
​

© Reuters

Simeon Kerr in Dubai, Anjli Raval in Lausanne and Arash Massoudi in London
55 minutes ago

Saudi Aramco is set to sign a deal on Wednesday to acquire a majority stake in the kingdom’s petrochemicals giant Saudi Basic Industries Corporation, or Sabic.

The state oil company has been in talks for months to buy the kingdom’s sovereign Public Investment Fund stake in the Riyadh-listed petrochemicals firm.

“It’s imminent,” said one person briefed on the transaction. “It is happening today.”

Saudi Aramco is due to announce an acquisition of the PIF’s full 70 per cent stake in Sabic for a price less than the rumoured $70bn, two people said.

The deal, first reported by Bloomberg, aims to transfer funds to the PIF, the preferred vehicle of crown prince Mohammed bin Salman, to carry out economic reforms seeking to diversify the kingdom away from oil.

The kingdom is planning to issue a $10bn bond to partly fund the purchase of the PIF’s controlling stake.


https://www.ft.com/content/35f274fe-50a1-11e9-9c76-bf4a0ce37d49

 

[The SC]

* The price is $69.1 billion.. so it is very close to the rumoured $70 billion
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In October, Saudi Crown Prince Prince Mohammed bin Salman said that in order for Aramco to be launched on the global market, it must provide integrated services.

"We know that the new demand for Oil in 20 years from today will be on petrochemicals, so Aramco has to invest in these projects," he said in an interview with Bloomberg.

He also said, "If Aramco does business in petrochemicals, SABIC, which produces petrochemicals, will suffer, because Aramco supply it with oil."

Bin Salman said in the interview that before Aramco followed these steps, it would have to be agreed with SABIC to ensure that they would benefit from the process.

The Saudi Public Investment Fund has reached an agreement to sell its 70% stake in SABIC to Aramco, with Aramco executing the merger to acquire a giant company in Saudi Arabia, according to the crown prince.

"After completing this transaction, we will not be able to put Aramco directly for subscription because it needs at least a full fiscal year before the public offering," Bin Salman told Bloomberg.

Bin Salman expected the deal to be concluded between SABIC and Aramco this year.

"We will try to think of the proposal as much as we can, but the timing depends on the situation we are in," said Crown Prince Blumberg.

https://www.masrawy.com/news/news_economy/details/2019/3/27/1539888/أرامكو-تشتري-70-من-شركة-سابك-مقابل-69-1-مليار-دولار

 

[waraich66]

Era of oil boom is over . Solar and Wind , Electric transportation, IT are future emerging technologies . World top 5 companies will be IT , Solar Wind and Electric car manufacturers.

 

[BATMAN]

Era of oil boom is over . Solar and Wind , Electric transportation, IT are future emerging technologies . World top 5 companies will be IT , Solar Wind and Electric car manufacturers.

Don't be upset, Aramco will buy all those top 5.
Anyway, Saudi Arabia has far more solar power generation than any other regional state.
Oil demand is not falling down any time soon and currently it's priced decently.

Aramco-Sabic venture will make the org. more efficient and important at international level.
I see it as a strategic move.

 

[waraich66]

Don't be upset, Aramco will buy all those top 5.
Anyway, Saudi Arabia has far more solar power generation than any other regional state.
Oil demand is not falling down any time soon and currently it's priced decently.

I worked in SABIC and Aramco projects . Saudia need to restructure immigration laws to attract good brain from world . first thing first . They have great potential no doubt.
How are you dear , glad to see you to again after long time , keep in touch !!!

 

[BATMAN]

I worked in SABIC and Aramco projects . Saudia need to restructure immigration laws to attract good brain from world . first thing first . They have great potential no doubt.
How are you dear , glad to see you to again after long time , keep in touch !!!

Hi Warraich,
I also worked in both Sabic and Aramco, actually at most of their facilities around Kingdom.
At least they plan their project carefully, construct it with quality, which is always key.
Operational costs may be bit higher, but that's no big deal, considering they have huge profits and hardly ever had accidents. Last but not least, they are top employers.
Now together, they can dictate the rules of game even more.

With Immigration laws, if you mean Saudi Passport. There is legal frame work for it, but again they do not advertise it.
If any one wish to invest, that's also possible.

@The SC
what's the status of tourist visa? and what's the current investment limits?

 

[The SC]

Hi Warraich,
I also worked in both Sabic and Aramco, actually at most of their facilities around Kingdom.
At least they plan their project carefully, construct it with quality, which is always key.
Operational costs may be bit higher, but that's no big deal, considering they have huge profits and hardly ever had accidents. Last but not least, they are top employers.
Now together, they can dictate the rules of game even more.

With Immigration laws, if you mean Saudi Passport. There is legal frame work for it, but again they do not advertise it.
If any one wish to invest, that's also possible.

@The SC
what's the status of tourist visa? and what's the current investment limits?

Visa is open to all (normal people!) I heard..and there are no investment limits, as long as localisation projects are included..

Maybe warraich is thinking about 20-30 years ago or more, but now both Aramco and Sabic are huge world organisations with state of the art corporate governance and some of the best managers out there on all levels..
This merger was a must for the coming Aramco IPO in 2021-22..It is a worldwide event.. (See MBS interview with Bloomberg..he detailed it quite nicely)..The $70 billion will be provided by world banks.. it is a smart move in the sense that it will go to the state account and thus be used to finance very lucrative projects inside the kingdom.. in other words, the loans will be paid through profits made in different important projects..
Do Warraich know about the 200 GW solar project for 2030..and the fact that Saudi Arabia is already producing solar panels and all their components locally and that there is a lot of R&D going on.. or the investments in Tesla company as well as in its competitors..among many other future technologies.. hopefully he has heard about NEOM project too..

 

[BATMAN]

Visa is open to all (normal people!) I heard..and there are no investment limits, as long as localisation projects are included..

Maybe warraich is thinking about 20-30 years ago or more, but now both Aramco and Sabic are huge world organisations with state of the art corporate governance and some of the best managers out there on all levels..
This merger was a must for the coming Aramco IPO in 2021-22..It is a worldwide event.. (See MBS interview with Bloomberg..he detailed it quite nicely)..The $70 billion will be provided by world banks.. it is a smart move in the sense that it will go to the state account and thus be used to finance very lucrative projects inside the kingdom.. in other words, the loans will be paid through profits made in different important projects..
Do Warraich know about the 200 GW solar project for 2030..and the fact that Saudi Arabia is already producing solar panels and all their components locally and that there is a lot of R&D going on.. or the investments in Tesla company as well as in its competitors..among many other future technologies.. hopefully he has heard about NEOM project too..

MBS is an example of modern leadership of world class level. He is running KSA like any capable CEO.
When people used to claim on this forum that soon Saudi oil will dry, and all of it will collapse, i could not believe at the idiotic level of those commentators. They were either spreading nonsense on purpose or had no clue about Saudi industrial base. Actually Saudi Arabia is a country where there are industrial cities, like Damam, Jubail and Yanbu, may be now you have more!
Last time i visited Saudi, and found out Maadan is very busy!

 

[The SC]

MBS is an example of modern leadership of world class level. He is running KSA like any capable CEO.
When people used to claim on this forum that soon Saudi oil will dry, and all of it will collapse, i could not believe at the idiotic level of those commentators. They were either spreading nonsense on purpose or had no clue about Saudi industrial base. Actually Saudi Arabia is a country where there are industrial cities, like Damam, Jubail and Yanbu, may be now you have more!
Last time i visited Saudi, and found out Maadan is very busy!

There are more industrial cities being built, and so many other projects that the most arduous followers of the news get lost in numbers ..And better yet, a lot of these huge projects are interlinked to make the Saudi vision 2030 a reality..The work is immense.. it took someone capable like MBS with his will and energy _plus a no less capable team_ to plan and execute a whole long term comprehensive vision for the country to propulse it "light years" ahead towards modernisation on all levels, and to follow on almost every implementation detail..

 

[waraich66]

Visa is open to all (normal people!) I heard..and there are no investment limits, as long as localisation projects are included..

Maybe warraich is thinking about 20-30 years ago or more, but now both Aramco and Sabic are huge world organisations with state of the art corporate governance and some of the best managers out there on all levels..
This merger was a must for the coming Aramco IPO in 2021-22..It is a worldwide event.. (See MBS interview with Bloomberg..he detailed it quite nicely)..The $70 billion will be provided by world banks.. it is a smart move in the sense that it will go to the state account and thus be used to finance very lucrative projects inside the kingdom.. in other words, the loans will be paid through profits made in different important projects..
Do Warraich know about the 200 GW solar project for 2030..and the fact that Saudi Arabia is already producing solar panels and all their components locally and that there is a lot of R&D going on.. or the investments in Tesla company as well as in its competitors..among many other future technologies.. hopefully he has heard about NEOM project too..

Dear , My friends still working in Aramco and SABIC .The real reason behind the merger is objection by the competitors of SABIC is the cheap or no cost supply of gas from Aramco to Sabic . Basically Royal family majority shares holder in both the companies , which is also un ethical as per western democratic standards . It is also lesson of Islam Hazrat Abu Bakar ra stopped his cloth business after khilafat .

 

[The SC]

Dear , My friends still working in Aramco and SABIC .The real reason behind the merger is objection by the competitors of SABIC is the cheap or no cost supply of gas from Aramco to Sabic . Basically Royal family majority shares holder in both the companies , which is also un ethical as per western democratic standards . It is also lesson of Islam Hazrat Abu Bakar ra stopped his cloth business after khilafat .

But the cost of Oil and gas might get higher for Sabic if Aramco shares are in public hands, both locally and internationally.. We should not forget the positive effect of the merger on both corporations _and the state_..these two complement each other very well..

"Saudi Aramco shareholders own Saudi Aramco. The shareholder is currently the government of Saudi Arabia. This is one of the reasons that Saudi Aramco is considered an NOC (a “National Oil Company”, as opposed to an “IOC” (International Oil Company, like Exxon): the distinction between simple ownership and control by the government and ownership by the shareholder(s) is largely a technical one. In practice, there is a barrier that is maintained in operational control as well. This distinction is expected to serve the company well in the near-term as approximately 5% of shares are expected to be sold on at least two stock exchanges, one domestic (Saudi) and another International, such as the NYSE or the London, Hong Kong, Tokyo or Toronto stock exchanges, all of which are vying for shares."

https://www.quora.com/Who-owns-Saudi-Aramco



Saudi Aramco reaches $69.1 billion deal to buy majority stake in petrochemicals firm Sabic

• Saudi oil giant Aramco reaches deal to buy majority stake in petrochemicals firm Sabic for $69.1 billion.
• The 70 percent stake is currently held by Saudi Arabia's sovereign wealth fund.
• The deal expands Aramco's footprint in refining and petrochemicals and injects cash into the kingdom's Public Investment Fund.

Investors own the remaining 30 percent stake in Sabic through shares listed on the Saudi stock exchange. Aramco says it does not intend to purchase those shares.

https://www.cnbc.com/2019/03/27/saudi-aramco-reaches-deal-to-buy-majority-stake-in-sabic.html

 

[waraich66]

But the costof Oil and gas might get higher for Sabic if Aramco shares are in public hands, both locally and internationally.. We should not forget the positive effect of the merger on both corporations _and the state_..these two complement each other very well..

"Saudi Aramco shareholders own Saudi Aramco. The shareholder is currently the government of Saudi Arabia. This is one of the reasons that Saudi Aramco is considered an NOC (a “National Oil Company”, as opposed to an “IOC” (International Oil Company, like Exxon): the distinction between simple ownership and control by the government and ownership by the shareholder(s) is largely a technical one. In practice, there is a barrier that is maintained in operational control as well. This distinction is expected to serve the company well in the near-term as approximately 5% of shares are expected to be sold on at least two stock exchanges, one domestic (Saudi) and another International, such as the NYSE or the London, Hong Kong, Tokyo or Toronto stock exchanges, all of which are vying for shares."

https://www.quora.com/Who-owns-Saudi-Aramco



Saudi Aramco reaches $69.1 billion deal to buy majority stake in petrochemicals firm Sabic

• Saudi oil giant Aramco reaches deal to buy majority stake in petrochemicals firm Sabic for $69.1 billion.
• The 70 percent stake is currently held by Saudi Arabia's sovereign wealth fund.
• The deal expands Aramco's footprint in refining and petrochemicals and injects cash into the kingdom's Public Investment Fund.

Please read for info : Aramco Sabic Deal should be a warning to Saudi Investors , by Ellen R Wald - FORBES
Investors own the remaining 30 percent stake in Sabic through shares listed on the Saudi stock exchange. Aramco says it does not intend to purchase those shares.

https://www.cnbc.com/2019/03/27/saudi-aramco-reaches-deal-to-buy-majority-stake-in-sabic.html

Please read for info : Aramco Sabic Deal should be a warning to Saudi Investors , by Ellen R Wald - FORBES

 

[The SC]

Please read for info : Aramco Sabic Deal should be a warning to Saudi Investors , by Ellen R Wald - FORBES

"The truth is you can't negotiate against a king and you can't compete with the government." this is true all over the world..can big companies compete for land with the government if it needs that piece of land? No way..
But how she knows the confidential internal mechanics of the deal to be able to say that the other investors were not present or had no say!?.. In fact the article has not much to say about the deal.. you can see that in the first part..and then she jumps to PIF's other investments.. and the Government and the king and the absolute monarchy.. her article's agenda is clear as well as Forbes' one..in fact the whole West is mad because Aramco's IPO was postponed, they wanted it as vulnerable as it could be.. but that is not how it works, mostly when dealing with Aramco and Saudi Arabia.. everyone looks for his best interests..