Aramco takes full ownership of Dutch firm
Saudi Aramco, the world’s largest oil producing company, said yesterday it has taken full control of a Dutch rubber joint venture in a transaction valued at €1.5 billion (Dh6.38bn).
The Saudi state producer bought the remaining 50 per cent stake in Arlanxeo, acquiring the shares of its partner Lanxess.
Aramco and its Dutch partner had formed a speciality chemicals joint venture in 2016.
The complete acquisition of the chemicals venture will diversify Aramco’s downstream portfolio and “accelerate growth into new chemicals including butadiene and isobutylene,” Aramco senior vice president, downstream, Abdulaziz Al Judaimi said.
The two chemical compounds are used largely in the manufacture of synthetic rubber.
Aramco, which produces and sells crude on behalf of the Saudi state, has expressed its intentions to become an “energy and chemicals” company as it looks to earn more margins from the sale of refined products.
Aramco has progressed with large-scale chemical ventures at home and abroad including the development of a $20bn oil-to-chemicals facility along the Red Sea coast in the kingdom, and a $44bn refining and chemicals complex on the west coast of India.
The plans are at the heart of its diversification strategy that aims to turn two to three million barrels of oil products per year into chemicals.
Aramco’s Dutch investment will leverage on the “strong feedstock position” of the company, it said.
The parties are targeting to complete the transaction at the end of the year. The deal has been approved by the boards of both Aramco and Lanxess and remains subject to regulatory approvals and consultation of relevant employee representative bodies.
The acquisition is set to “enhance Aramco’s sustainability efforts” particularly in the field of performance-related fuel consumption, with potential savings of almost 7 per cent.
Aramco, which has recently begun to develop research capabilities in fuel efficiency and announced the signing of a partnership with Japanese car maker Mazda yesterday, will see complementary benefits from the full ownership of Arlanxeo.