Aramco in talks to acquire PIF’s stake in Sabic

Oil_refineryThe Public Investment Fund (PIF), a Saudi Arabian sovereign wealth vehicle, is in preliminary talks to sell part of its stake in Saudi petrochemical firm Sabic to state-owned oil company Saudi Aramco. The PIF owns 70% of Sabic, the world’s fourth largest petrochemical firm with a market cap of $103 billion. The remaining 30% stake is listed on the Saudi exchange.  It is not known what portion of PIF’s Sabic stake will be sold but it is likely that the transaction would be private rather than through the exchange. This news has led to speculation that the deal is primarily designed to provide the PIF with cash to fund further investments in other companies. The Saudi government had hoped to raise $100 billion through an initial public offering of Aramco with the intention of using the money to set up a large sovereign wealth fund this year. The listing has now been delayed until 2019 at the earliest. News of a possible Sabic transaction follows reports earlier this month that the PIF had approached a number of banks for its first ever loan. According to the report from Bloomberg, the PIF is looking to borrow as much as $5 billion this year from a select number of banks. ©2018 funds global mena

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