The Saudi Arabian national petroleum and natural gas company, Aramco, yesterday 27th March, 2019 announced that they have acquired 70% percent of the Saudi state controlled SABIC, the Saudi Arabian diversified manufacturing company which is active in petrochemicals, chemicals, industrial polymers, fertilizers, and metal for a whooping sum of $69.1 billion.
The investment from the oil giant obviously put to rest the planned initial public offer (IPO) of SABIC and more money to the coffers of the majority share holder of SABIC which is the Saudi Arabia’s sovereign wealth fund.
This deal between Aramco and SABIC has made more money available for the Saudi’s Crown prince, Mohammad bin Salman in funding his planned campaign to diversify the economy from oil as he plans to invest into clean energy and new technologies. With the billions coming from Aramco, Mohammed bin Salman’s dream is in the right course.
It is also expected that financial firm that had earlier worked of the IPOI.P.O. pivoted to advisory roles on the Sabic deal, and many will arrange what’s expected to be a huge bond sale to help finance the transaction. As part of a bond offering, the oil company will have to disclose its financial operations to potential investors. It’s unclear how much it will reveal, but any look at its huge oil reserves is sure to be of interest.
