Saudi Aramco said last week that it agreed to purchase Hanjin Groups 28 percent stake in S-Oil Corp. The transaction would give Aramco majority control of the South Korean refiner, one of the worlds largest merchant suppliers of highly refined base oils.
Aramco said the conceptual agreement calls for its subsidiary, Aramco Overseas Co. B.V., to pay Hanjin 2.0 trillion won (U.S. $1.95 billion). The deal is contingent on execution of a formal agreement and regulatory approval.
This transaction underscores Saudi Aramcos confidence in the Korean economy and its strategy to enhance its presence in the growing Asian markets and AOCs commitment to S-OIL growth, Saudi Aramco President and Chief Executive Officer Khalid A. Al-Falih said in a written statement.
Aramco already owns 35 percent of S-Oil, so the acquisition would increase its stake to 63 percent. South Korean investors own the other 37 percent.
Hanjin, a Seoul-based conglomerate, said in December that it wanted to sell its S-Oil shares to raise funds for one of its flagship businesses, Korean Airlines.
S-Oils oil refinery in Ulsan, South Korea, is one of the worlds largest and includes a base oil plant with capacity to make 1.9 million metric tons per year of API Group II and III base stocks. The base oil plant is second-largest in the world. Aramco is the worlds largest crude oil supplier.