A purchase under study by Saudi Aramco of a stake in chemical manufacturer Saudi Basic Industries Corp. (SABIC) might delay the planned initial public offering of 5% of the oil producer, according to press reports.
Aramco has confirmed it is in “very early-stage discussions with the Public Investment Fund (PIF) regarding acquiring a strategic interest in SABIC by way of a private transaction.”
The PIF is a sovereign wealth fund that would receive a liquidity boost from an Aramco IPO or a purchase by Aramco of some of its 70% stake in SABIC.
The government wants to raise funds for investment in economic modernization.
The IPO initially was to have occurred this year, although a delay had been considered probable even before the prospective SABIC deal came to light (OGJ Online, Mar. 28, 2017).
Aramco said it has no plans to acquire any of the 30% of SABIC shares held by the public.
“Consistent with the company’s strategy of rebalancing its portfolio by moving further into downstream and the petrochemical sector in particular, the company has been evaluating a number of acquisition opportunities, both local and global,” Aramco said in a press statement.