Saudi Aramco has invited banks to pitch for an advisory role on the potential acquisition of a strategic stake in Saudi Basic Industries Corp (SABIC), two sources with direct knowledge of the matter told Reuters.
Slated for an initial public offering, state oil giant Aramco, which is expanding in refining and petrochemicals, made the invitation last month, said the sources, declining to be identified due to commercial sensitivities.
Riyadh-listed SABIC, the world’s number-four chemical firm, is 70 per cent owned by the Public Investment Fund, Saudi Arabia’s top sovereign wealth fund. It has a market capitalisation of SAR385.2bn ($102.7bn).
The process is in the initial stages and Aramco may or may not decide to go ahead with the deal, the sources said.
Sovereign fund the Public Investment Fund later confirmed the deal in a statement carried by Saudi Press Agency.
“The fund would like to state in this regard that [it] is holding preliminary talks with Saudi Aramco to buy Aramco a strategic stake in SABIC,” it said, adding the deal was at an initial stage and may not be reached.
“The fund will announce any significant developments with respect to this subject in due course and in accordance with the relevant regulatory requirement.”
With contributions from Reuters