Saudi Aramco this week completed its $69.1bn purchase of a 70% stake in fellow state energy behemoth Sabic from the PIF sovereign wealth fund. Adding in fees for a loan from PIF to help fund the purchase, Aramco will be handing over a cool $75bn. On the other hand, the state oil giant will benefit from a delayed payment schedule with the final payment not now due until 2028, back from 2025.
The acquisition was completed on 16 June, and valued Sabic at SR123.39 ($32.90) per share, the price originally agreed last March (MEES, 29 March 2019). However, as with energy stocks worldwide, Sabic’s share price has since tanked: on 16 June it was just SR89.40 ($23.84), just 72% of the price Aramco paid. Aramco’s newly-acquired stake is thus worth just $50bn – an immediate $19bn (38%) paper loss. (CONTINUED - 900 WORDS)