Aramco mulls stake in world’s no. 4 chemical firm

DUBAI: Saudi Arabia's government is considering a plan under which Aramco would buy a stake in Saudi petrochemical maker SABIC, a move that could boost the state oil giant´s market valuation ahead of a planned initial public offering.

Saudi Aramco has invited banks to pitch for an advisory role on the potential acquisition of a strategic stake in Saudi Basic Industries Corp, two sources with direct knowledge of the matter told Reuters.

Aramco wants to develop its downstream business as the government prepares to sell up to 5 percent of the world's largest oil producer, possibly by next year.

Boosting its petrochemicals portfolio further could help attract potential investors for the IPO. The Aramco IPO is the centrepiece of an ambitious plan championed by Crown Prince Mohammed bin Salman to diversify Saudi Arabia's economy beyond oil.

Aramco made the invitation to the banks last month, said the sources, declining to be identified due to commercial sensitivities. Riyadh-listed SABIC, the world´s fourth-biggest petrochemicals company, is 70 percent owned by the Public Investment Fund (PIF), Saudi Arabia´s top sovereign wealth fund.