Saudi Aramco’s Strange Chemical Attraction - Bloomberg

Saudi Aramco’s Strange Chemical Attraction - Bloomberg:

Saudi Aramco’s IPO may be on hold, but that doesn’t mean its bankers are idle.

It emerged on Thursday that the state-owned oil champion — full name: Saudi Arabian Oil Co. — is considering buying a stake in Saudi Basic Industries Corp., or Sabic, a giant chemicals firm.

From a banker’s perspective, such a deal is a gift — not least from a logistical perspective, since everyone involved is within easy reach of each other and largely answers to the same ultimate boss. Aramco is, of course, state-owned. Sabic, meanwhile, is 70 percent owned by Saudi Arabia’s Public Investment Fund (PIF) — or, for brevity’s sake, the state. The other 30 percent of Sabic is listed; indeed, with a market cap of about $104 billion, it’s the country’s largest listed company. But any purchase would involve only shares owned by the PIF, not traded on the Tadawul.