EU Clears Aramco's $69bn Petchem Purchase
The European Commission on February 27 gave its unconditional approval of Saudi Aramco's $69bn purchase of Riyadh-based petrochemicals giant Sabic, an EU filing shows.
Aramco announced plans to acquire 70% of Sabic from the Saudi Public Investment Fund in March 2019, a deal aimed at consolidating its push into the gas-based petrochemicals segment.
Sabic boasts an annual petrochemicals production capacity of 62mn mt, dwarfing Aramco's own output of 17mn mt. There are clear synergies between the pair: for one, Sabic uses subsidised gas supplies from Aramco as feedstock at its Saudi facilities.
Sabic has a considerable international presence, active in more than 50 countries. It is the biggest producer of ethylene in Europe, operating plants in Germany, the Netherlands and Ireland.
EU authorities decided to clear Aramco's acquisition without demanding concessions, following similar unconditional support from regulators in India and other countries.
Saudi Arabia wants to build up its petrochemicals industry in order to add value to its abundant gas resources. Aramco has increased its focus on gas exploration and development to support this year. It recently secured Saudi regulatory approval to develop the 200 trillion ft3 Jafurah gas field – a project valued at $110bn. The field's gas will be used for domestic purposes, including petrochemicals production.