SABIC, Clariant, and Saudi Aramco

SABIC, Clariant, and Saudi Aramco

Author: ChemistryViews

SABIC has increased its interest in Clariant from 24.99 % to 31.5 %. SABIC is Clariant’s largest shareholder. This brings its stake close to the one-third level required for a mandatory takeover bid. However, according to Reuters, SABIC has no interest in taking Clariant over. The company has shelved a joint venture plan with SABIC in July 2019.

SABIC is currently being acquired by Saudi Aramco. Saudi Aramco has gained unconditional EU antitrust approval for its $69 billion bid for a 70% stake in SABIC, according to an EU filing.

In August 2018, Saudi Aramco, Saudi Arabia’s state-owned oil company, announced that it would merge with SABIC by purchasing 70 % of the company from the Public Investment Fund (PIF) of Saudi Arabia, the kingdom’s sovereign wealth fund (SWF). In March 2019, Aramco signed a formal agreement that stated a purchase price of $69.1 billion.

Aramco has intensified its efforts to privatize through an initial private offering (IPO) on the Saudi Stock Exchange or Tadawul in Riyadh in December 2019. If Aramco is to join the ranks of publicly traded international oil companies (IOCs), it must be transparently managed and must diversify to resemble other IOCs in word and deed. Aramco has made progress towards transparency in April 2019 by issuing bonds worth $12 billion, and in November 2019 through the floating of its shares. The acquisition of SABIC represents a move towards diversification.

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