Saudi Aramco announced Wednesday that it will acquire an additional 22.5% stake in Rabigh Refining and Petrochemical Co. (Petro Rabigh) from Sumitomo Chemical for $702 million (SAR 2.6 billion), making the oil giant Petro Rabigh's majority shareholder.
Prior to the latest stake acquisition, Aramco and Tokyo-headquartered Sumitomo each owned 37.5% of shares in Petro Rabigh, which was listed on the Saudi Exchange in 2008, according to a regulatory filing posted on Tadawul. Upon completion of the transaction, which is priced at $1.86 (SAR 7) per share, Aramco will become Petro Rabigh’s largest shareholder with an
equity stake of 60% after acquiring 375,974,998 shares from Sumitomo, while the latter will retain an equity stake of 15%. Under the terms of the share sale and purchase agreement, Sumitomo will inject all proceeds from the sale into Petro Rabigh, an integrated refining and petrochemical complex in Saudi Arabia.
Further, Aramco will provide additional funds to Petro Rabigh via a mechanism to be agreed upon to improve its financial position and support its future strategy, bringing the aggregate injection amount to $1.5 billion (SAR 5.6 billion).
Aramco and Sumitomo have also agreed to a phased waiver of shareholder loans for 2024 and 2025. This year, $1 billion (SAR 3.7 billion) will be waived, with another $500 million (SAR 1.8 billion) to be waived next year. These measures are expected to enhance Petro Rabigh’s balance sheet and liquidity, as part of a remedial plan by Aramco and Sumitomo. This plan includes refinery upgrades to boost profitability. The agreement also supports Aramco’s downstream expansion and Sumitomo's shift from commodity to specialty chemicals, the statement added. Crucial quote
Aramco continues to identify opportunities to strengthen its downstream value chain, secure placement of its upstream crude oil with affiliated refineries, and convert more of its hydrocarbons into highvalue materials," said Hussain A. Al Qahtani, Aramco senior vice president of Fuels, said in a statement.
Saudi Aramco, the world’s largest oil company, continues its acquisition spree this year to diversify its revenue streams.
Last month, Aramco signed definitive agreements to acquire a 50% stake in the Jubail-based Blue Hydrogen Industrial Gases Company (BHIG), a wholly-owned subsidiary of Air Products Qudra (APQ).
In June, Saudi Aramco announced that it will acquire a 10% stake in a joint venture between automakers Renault and Geely, valuing the thermal engines business at $7.93 billion (€7.4 billion).
The Dhahran-based firm also announced in April it is negotiating to acquire a 10% stake in Chinese refiner Hengli Petrochemical for about $1.5 billion. A month earlier, the oil giant completed the acquisition of Chile-based fuel and lubricants retailer Esmax Distribusción, marking its first downstream retail investment in South America.
Saudi Aramco's net profit for the first half of the year fell 9.1% year-on-year to $56.3 billion (SAR 211.3 billion), while its revenues marginally declined to $220.5 billion (SAR 827.8 billion), its financials showed on August 6.
According to the company, the lower profits were due to reduced crude oil sales volumes and weakening refining margins, partly offset by higher crude oil prices.
