Aramco announced on Wednesday that it has signed a definitive agreement to acquire an additional 22.5% stake in Rabigh Refining and Petrochemical Co. (Petro Rabigh) from Sumitomo Chemical for $702 million. This acquisition will increase Aramco's stake to approximately 60%, making it the largest shareholder in Petro Rabigh, while Sumitomo Chemical will retain a 15% equity stake. Currently, both Aramco and Tokyo-headquartered Sumitomo Chemical each own 37.5% of shares in Petro Rabigh, which was listed on the Saudi Exchange in 2008. The transaction prices a share at SR7 and is subject to customary closing conditions, including regulatory and other third-party approvals. The transaction is part of a broader financial strategy to bolster Petro Rabigh's financial stability. Proceeds from the sale received by Sumitomo Chemical will be reinvested into Petro Rabigh. Aramco will also inject an additional $702 million into Petro Rabigh, matching Sumitomo Chemical's contribution, bringing the total capital injection to $1.4 billion. Additionally, Aramco and Sumitomo Chemical have agreed to a phased waiver of shareholder loans amounting to $750 million each, resulting in a $1.5 billion reduction in Petro Rabigh's liabilities. These measures aim to enhance Petro Rabigh's balance sheet and liquidity as part of a broader remedial plan that includes upgrading the refinery to improve profitability. The agreement aligns with Aramco's downstream expansion goals and Sumitomo Chemical's shift from commodity chemicals to specialty chemicals. Aramco Senior Vice President of Fuels Hussain Al Qahtani stated, "By increasing our shareholding, we expect to achieve even closer integration with Petro Rabigh and facilitate its turnaround strategy." Sumitomo Chemical's Senior Managing Executive Officer Seiji Takeuchi noted that the transaction is crucial for enhancing Petro Rabigh's financial position amid the evolving business landscape in the refining and petrochemical sectors. — SG
