Saudi Aramco Weighs Global Bond Sale to Finance Purchase of Sabic Stake from PIF

Saudi Aramco is considering tapping the international bond market for the first time, Bloomberg and the WSJ report, in order to finance the acquisition of petrochemical giant Sabic.

The move into global capital markets could offer an alternative to an initial public offering, according to Bloomberg, citing people familiar with the talks.

‘The plans for a bond, likely to be combined with banks loans, are very preliminary but would allow the state-owned company to raise cash to pay the country’s sovereign wealth fund for the 70 percent stake it owns in Sabic, valued at about $70 billion. In turn, the Public Investment Fund would obtain the money it had initially hoped to raise from the Aramco IPO, the same people said, asking not to be named because the talks are private,” Bloomberg reports.

Experts on Saudi business told Arab News that there is “a sound industrial logic to a potential move for SABIC, and that the effect on the IPO plans would not necessarily be negative. Long term, a deal with SABIC could make Aramco a more attractive proposition for global investors.”