situation report

Aug 12, 2019 | 13:22 GMT

1 min read

India: Saudi Aramco Acquires 20 Percent Stake in Reliance Industries

What Happened: Saudi Arabian Oil Co. (Saudi Aramco) has agreed to acquire a 20 percent stake in Indian oil company Reliance Industries Ltd.'s oil and chemicals segment for $15 billion, The Wall Street Journal reported Aug. 12.

Why It Matters: Saudi Aramco's move comes as it is attempting to boost its valuation for a potential initial public offering after also taking over a majority stake in Saudi Basic Industries Corporation.

Background: The Saudi government is reportedly targeting the first half of 2020 to launch the IPO. However, a global economic slowdown and weak oil pricing will make it harder for Riyadh to secure the $2 trillion valuation for Saudi Aramco as desired by Crown Prince Mohammed bin Salman.

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