|Saudi Basic Industries Corporation (SABIC) announces the completion of Saudi Aramco acquisition of Public Investment Fund (PIF) stake in (SABIC). The parties signed the final agreement on Tuesday 24 Shawwal 1441 corresponding to June 16, 2020. Saudi Aramco becomes a major shareholder in SABIC with ownership of 70% of capital. |
The transaction will support the realization of the vision of the Kingdom of Saudi Arabia 2030. It will be a key pillar for SABIC to continue as the leader of the petrochemical industry in Saudi Arabia, and reinforcing its strategy to become the world leader in chemicals. It will also strengthen Saudi Aramco's position to become one of the world's largest integrated energy and chemical companies. In addition, it will support the Public Investment Fund to re-invest the significant capital in potential new sectors that will contribute to the long-term diversification of Saudi Arabia's income.
On the other hand, SABIC's Board of Directors (Board) would like to highlight that the company will continue its course of business towards its shareholders, employees and other stakeholders. It is worth mentioning the following points in relation to the deal impact :
Firstly: SABIC Governance
• SABIC will continue to be a listed company in the Saudi Stock Exchange.
• SABIC will continue to operate within its legal regulatory framework and will continue to exercise its robust governance practices.
• The remaining 30% of publicly traded shares in SABIC are not part of the transaction.
• SABIC’s Board of Directors will continue to represent all shareholders; perform its duties of care and loyalty in managing the Company’s affairs and undertake all actions in the general interest of the Company and develop it and maximize its value.
• SABIC’s dividend policy will continue to consider the company’s financial position, cash flows and investment plans which will enable SABIC to continue to provide competitive dividends to shareholders while maintaining a strong financial position.
Secondly: SABIC Strategy
• SABIC’s strategy will support Saudi Aramco’s strategy and the Kingdom’s 2030 vision.
• In collaboration with Saudi Aramco, SABIC will be the Chemicals growth platform of Saudi Aramco, which reinforces SABIC’s strategy to become the world leader in chemicals.
• Both companies will work to strategically align Upstream, Downstream and Chemicals to maximize value for all shareholders and support growth.
• SABIC’s intent is to maintain a strong investment grade credit rating on a stand-alone basis.
• It is expected that the transaction will provide significant growth opportunities, which are expected to enhance career opportunities.
Fourthly: Financial impacts as result of the deal
• Upon effectiveness of the suggested Zakat Implementing Regulations issued by General Authority of Zakat and Tax (GAZT), SABIC will remain a zakat payer. SABIC will remain subject to applicable Zakat and Tax regulations, and its disclosure requirements.
• As a result of the alignment of relevant accounting policies, there is no financial impact on the consolidated equity, nor the net income attributable to SABIC shareholders. (Attachment for more details).
It is worth mentioning that the rights and obligations of shareholders as per rules and regulations in Saudi Arabia shall apply to Saudi Aramco. In respect of this transaction, Saudi Aramco may not dispose its shares within six months following the completion of the transaction without prior approval from CMA and according to its conditions.