Saudi Aramco is in “very early-stage discussions” with the kingdom’s sovereign wealth fund Public Investment Fund (PIF) to acquire a stake in petrochemical maker SABIC (Saudi Basic Industries Corporation), the company said on Thursday.
The statement comes after media reports claimed that state oil giant Aramco invited banks last month to pitch for an advisory role in the acquisition.
“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,” an Aramco statement said.
The negotiations are still in the “preliminary” phase, the official Saudi Press Agency (SPA) quoted the statement as saying.
“There is no certainty that any such transaction will take place,” Aramco added.
It also affirmed that it has “no plans to acquire any publicly held shares of SABIC”.
Riyadh-listed SABIC, the world’s number-four chemical firm, is 70 per cent owned by the PIF. It has a market capitalisation of SAR385.2bn ($102.7bn).
The wealth fund also confirmed that talks were on with Aramco for the SABIC stake sale.
“The fund will announce any significant developments with respect to this subject in due course and in accordance with the relevant regulatory requirement,” it said.
Aramco is expected to launch an IPO next year as part of the government’s ambitious Vision 2030 plan to diversify the kingdom’s economy beyond oil.
Saudi Crown Prince Mohammed bin Salman has said he expects the IPO to value Aramco at around $2 trillion, meaning a sale of 5 per cent could raise $100bn to help fund Vision 2030 projects.