Saudi Aramco's acquisition of Sabic for $ 69 billion will increase value, says S & P

Saudi Aramco, the world's largest oil producer, is expected to benefit from its rising value after acquiring 70% stake in Sabic's petrochemicals company for $ 69 billion, S & P Global Ratings said.

Aramco has bought the participation of the Public Investment Fund, the sovereign wealth fund of the country, as part of its project to develop its petrochemical portfolio.

"We believe this agreement will help add value to the crude oil that it produces and develops in the petrochemicals sector, where demand is growing faster than for crude oil," S Sunday said. & P. "In addition, we view the transaction as strengthening Sabic's role in the Saudi government's efforts to diversify its economy."

The acquisition of Aramco fits into its long-term strategy to generate growth through a strengthened downstream portfolio by increasing global refining capacity from 4.9 to 8 million to 10 million. million barrels a day by 2030, including 2 to 3 million barrels a day. be transformed into petrochemicals. This downstream portfolio will consume significant quantities of crude oil from Saudi Arabia.

Aramco, which is the subject of a first public offering, has postponed the expected 5 percent sale in 2018 to growth in its petrochemicals and badets portfolio, Saudi officials said on Wednesday. 39, last year.

The IPO is part of the kingdom's reform program, which also plans to woo foreign investment and create new sources of income to wean off oil, all within the framework of Vision 2030.

PIF, which manages approximately $ 300 billion in badets, is involved in the process of diversifying the economy and plans to strengthen its international investments to bring badets to $ 2 trillion by 2030.

PIF is charged with enabling the creation of new sectors and opportunities that will shape the future global economy, while driving the economic transformation of Saudi Arabia. Along with its global strategic partners and investment managers, PIF is the Kingdom's main investment arm to implement a strategy focused on delivering attractive financial returns and long-term value for the world. Saudi Arabia, in accordance with Vision 2030.

"The sale should also facilitate PIF's strategic investments, which is a key driver of the government's broader economic diversification plan," said S & P.