European Commission greenlights Saudi Aramco-SABIC deal

On Friday, the European Commission unconditionally approved Saudi’s Aramco’s majority stake acquisition in the kingdom’s petrochemicals group Saudi Basic Industries Corp (SABIC).

This approval takes Saudi Aramco one step closer to receiving all the approvals it requires to acquire a 70 per cent stake in SABIC from the kingdom’s Public Investment Fund (PIF) for $69.1bn.

Read: Saudi Aramco to buy SABIC in $69bn chemicals mega-deal

The acquisition of SABIC is a key part of Aramco’s strategy of moving downstream from oil production into chemicals, and is also a way to help the PIF raise cash to fund its investment plans.

The deal will inject billions of dollars into the PIF, supporting its plans to create jobs and diversify the largest Arab economy beyond oil exports, including a mega business zone in the northwest of the country.

Coinciding with it receiving the EU antitrust approval, Saudi Aramco said in a press statement, as reported by Arab News, “With this, the proposed acquisition has now received unconditional clearance in all jurisdictions in which pre-notification antitrust filings are required. The closing of the proposed transaction is subject to the remaining customary closing conditions contained in the Share Purchase Agreement.”

Read: Saudi Aramco delays payment on SABIC acquisition by four years

Saudi Aramco will delay fully paying for the acquisition by four years until September 2025 under the terms of a revised deal agreed with SABIC in October.

Read: Saudi’s SABIC sticking with growth plans, will discuss synergies with Aramco

Aramco will also only pay the kingdom’s sovereign wealth fund about a third of the $69.1bn price tag in cash.

The acquisition is expected to be cleared in the middle of this year.

Read: Saudi Aramco crosses the $2 trillion mark on Thursday

In December, Aramco raised $25.6bn in the biggest-ever IPO, selling shares at 32 riyals each and valuing the company at $1.7 trillion, overtaking Microsoft and Apple as the most valuable listed company.