Aramco to Become Majority Shareholder in Petro Rabigh

The Saudi Arabian oil giant Aramco has signed an agreement to acquire an additional 22.5% stake in Rabigh Refining and Petrochemical Co. (Petro Rabigh) from Sumitomo Chemical for $702 million. Currently, both Aramco and Sumitomo Chemical hold 37.5% shares in Petro Rabigh, listed on the Saudi Exchange since 2008.

Upon completion of the transaction, priced at SAR7 ($0.27) per share, Aramco will become the majority shareholder with an approximately 60% equity stake, while Sumitomo Chemical will retain 15%. This deal is subject to customary closing conditions, including regulatory and third-party approvals.

Sumitomo Chemical will reinvest the $702 million proceeds from the sale back into Petro Rabigh, and Aramco will match this amount, bringing the total injection to $1.4 billion.

Aramco and Sumitomo Chemical have also agreed to a phased waiver of $750 million in shareholder loans each, reducing Petro Rabigh's liabilities by $1.5 billion.

In June, Aramco announced its acquisition of a 10% equity interest in HORSE Powertrain Limited, a newly established global powerhouse in powertrain solutions. HORSE Powertrain Limited is headquartered in London and was established by Renault Group and Geely on May 31st, 2024.

Saudi Aramco's highly anticipated $12 billion share sale witnessed a surge in demand with all shares being snapped up mere hours after the deal opened.

The price of one share ranged between SAR 26.70 ($7.12) and SAR 29 ($7.73).

The offering coincides with OPEC+'s decision to extend production cuts into 2025.

During Aramco's 2019 IPO, global investors mainly balked at valuation estimates, leaving the government reliant on domestic buyers. The $29.4 billion IPO received $106 billion in orders, with international purchasers receiving approximately 23% of the shares.

In May, Saudi Arabia announced that it was planning a multi-billion-dollar share sale in the energy giant Aramco.