Saudi Basic Industries Corp. said Sunday that it had signed an agreement to acquire for $820 million the 50% stake that it doesn’t already own in its local joint venture with an affiliate of Royal Dutch Shell.
The company, better known as Sabic, said the transaction with Shell Arabia is subject to regulatory approval and expected to be completed before the end of 2017.
The two companies also signed a memorandum of understanding to study future investment opportunities in Saudi Arabia and abroad, Sabic said.
The joint venture between Sabic–one of the world’s largest petrochemical companies–and Shell is called Sadaf. It operates a complex of six petrochemical plants in the Saudi coastal city of Jubail. The plants produce more than 4 million metric tons of chemicals per year.
“With this transaction Sabic is looking to capitalize on synergy opportunities of Sadaf with other affiliates, and improve its operation and profitability,” Yousef al-Benyan, Sabic’s chief executive, said in a statement.
Shell is involved in other downstream activities in the kingdom, including a crude-oil refinery with Saudi Aramco. The company also has other ventures with Saudi partners to produce lubricating oil and aviation refueling operations.
By Ahmed Al Omran
Source: MarketWatch
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