Saudi Aramco is in an advanced stage of negotiations to buy in an all-stock deal, valued at up to $25 billion, some 20 percent of the oil refining and chemicals business of India’s conglomerate Reliance Industries, Bloomberg reported on Monday, quoting sources familiar with the matter.
The Saudi state-held oil giant would pay with Aramco shares for the 20-percent stake in the refining and chemicals arm of the oil-to-telecoms conglomerate Reliance Industries of India’s richest man, Mukesh Ambani.
An agreement could be reached as soon as the next few weeks, Bloomberg’s sources said.
The all-stock transaction would make the Indian conglomerate a shareholder in Aramco with a stake of some 1 percent, as per Bloomberg estimates based on the Saudi oil giant’s market valuation of around $1.9 trillion.
Two years ago, in August 2019, Saudi Aramco and Reliance Industries signed a non-binding letter of intent, under which Aramco was set to buy 20 percent in the oil to chemicals division of Reliance Industries. At an enterprise value of $75 billion for the entire division, the stake that Aramco would have bought would have been worth around $15 billion.
“This would be one of the largest foreign investments ever made in India,” Reliance Industries said two years ago.
However, discussions were put on hold and delayed after the pandemic hit the oil markets and significantly dented Saudi Aramco’s revenues and net profits last year.
The talks have apparently resumed as markets recovered, but they have yet to be completed, according to Bloomberg’s sources.
Closer relations between Aramco and Reliance would benefit Saudi Arabia, the world’s largest oil exporter, which looks to lock in future oil sales in one of the fastest-growing oil demand markets, India.
The long-delayed deal between Saudi Aramco and Reliance Industries looks closer to going ahead following the recent appointment of Aramco chairman, Yasir Al-Rumayyan, as an independent director on the board of Reliance, OilPrice reported last month.
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By Tsvetana Paraskova for Oilprice.com
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