As per the share purchase agreement, Saudi Aramco will be buying the majority stake in SABIC at SAR123.39 ($32.9) per share.

The remaining 30% in the petrochemical company includes publicly traded shares that have been excluded from the transaction. Saudi Aramco revealed that it has no intention to take over the remaining shares.

SABIC’s operations span across more than 50 countries and its total production volume from its various business divisions was 75 million metric tons in 2018.

Founded in 1976, the Saudi Arabia-based company, which has a workforce of around 34,000 employees, recorded annual sales of $45bn in 2018, holding assets worth $85bn.

Saudi Aramco said that the acquisition aligns with its long-term strategy to achieve growth through improved downstream portfolio by boosting its global participated refining capacity to 8-10 million barrels per day by 2030 from the existing capacity of 4.9 million barrels per day.

The Saudi Arabian oil giant expects 2-3 million barrels per day of its targeted refined capacity to be converted into petrochemical products. Further, the company’s downstream portfolio will use significant volumes of Arabian crude oil.

Saudi Aramco president and CEO Amin Nasser said: “This transaction is a major step in accelerating Saudi Aramco’s transformative downstream growth strategy of integrated refining and petrochemicals. SABIC is a world-class company with an outstanding workforce and chemicals capabilities.

“As part of the Saudi Aramco family of companies, together we will create a stronger, more robust business to enhance competitiveness and help meet rising demand for energy and chemicals products needed by our customers around the world.”

SABIC said that the acquisition by Saudi Aramco will be an important pillar in the development of the petrochemicals industry in Saudi Arabia. Furthermore, it consolidates Saudi Aramco’s position as one of the largest integrated energy and chemical companies in the world.

SABIC vice chairman and CEO Yousef Al-Benyan said: “I believe the potential rewards of this deal are clear and support our vision to be the preferred world leader in chemicals.

“SABIC will benefit from the additional scale, technology, investment potential, and growth opportunities Saudi Aramco will bring as a global leader in integrated energy and chemicals production, while remaining focused on meeting the needs of our customers and the creation of value for all our shareholders.”

The closing of the deal will be based on receipt of regulatory approvals along with meeting of certain closing conditions.

Last month, Saudi Aramco signed a joint venture agreement with NORINCO Group and Panjin Sincen to develop a fully integrated refining and petrochemical complex in China with an investment of more than $10bn.