Saudi Aramco's $69 billion Acquisition of SABIC

By Ilya Korzinkin, Mihir Gupta, Hugo Tay, Siddharth Sharma (University College London), Vincent Wess, and Julius Kalvelage (WHU) | 16/03/2020

 

Company Overview Acquirer (Saudi Aramco)

Saudi Aramco (officially Saudi Arabian Oil Company) is an oil and gas company based in Saudi Arabia. The firm’s main operations are divided into the “upstream segment” and the “downstream segment”. The former includes activities revolving around the exploration and development of crude oil, natural gas and natural gas liquids. The latter is focused on refining and petrochemical manufacturing, as well as on supply, trading and distribution. Saudi Aramco is considered to be the most valuable and profitable company worldwide.

  • Founded in: 1933

  • Headquarters: Dhahran, Saudi Arabia

  • CEO: Amin H. Al-Nasser

  • No. of employees: 76,000

  • Market cap: USD 1,59trn

  • EV: USD 1,58trn

  • LTM Revenue: USD 329bn

  • LTM EV/Revenue: 4.1x

  • LTM EBITDA: USD 193bn

  • LTM EV/EBITDA: 8.2x


Acquirer Company Overview (Public Investment Fund of Saudi Arabia)

The fund is the sovereign wealth fund of Saudi Arabia and with total estimated assets of $320 billion one of the largest sovereign wealth funds in the world. It was founded for the purpose of investing on behalf of the Government of Saudi Arabia

  • Founded in: 1971

  • Headquarters: Riyadh, Saudi Arabia

  • Chairman: Mohammad bin Salman (crown prince of Saudi Arabia)

  • AUM: $320 bn


Target Company Overview  (SABIC)

Headquartered in Riyadh, Saudi Arabia, SABIC (Saudi Basic Industries Corporation) is active in the areas of manufacturing, marketing and distribution of chemical, agri-nutrient and metal products in over 50 countries.

  • Founded in: 1976

  • Headquarters: Riyadh, Saudi Arabia

  • CEO: Yousef Abdullah Al-Benyan

  • No. of employees: 35,000

  • Market cap: USD 55.12bn

  • EV: USD 56.7bn

  • LTM Revenue: USD 37.21bn

  • LTM EV/Revenue: 1.5x

  • LTM EBITDA: USD 8.4bn

  • LTM EV/EBITDA: 6.75x


Overview of the deal

Acquirer: Saudi Aramco

Seller: Public Investment Fund of Saudi Arabia