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Saudi Aramco is in advanced talks for an all-stock deal to acquire a stake in Reliance Industries Ltd.’s oil refining and chemicals business, people with knowledge of the matter said.

The Middle Eastern energy firm is discussing the purchase of a roughly 20% stake in the Reliance unit for about $20 billion to $25 billion in Aramco’s shares, the people said, asking not to be identified because the information is private. Reliance, which is backed by Indian billionaire Mukesh Ambani, could reach an agreement with Aramco as soon as the coming weeks, the people said.

Shares in Reliance extended gains to as much as 2.6% in Mumbai after the Bloomberg News report.

A deal would help Reliance lock in a steady supply of crude oil for its giant refineries and make the Indian company a shareholder in Aramco. Based on Aramco’s market valuation of about $1.9 trillion, a transaction would give Reliance a stake of around 1% in the world’s biggest energy company.

Details of the potential transaction are still being negotiated, and talks could drag on longer or fall apart, the people said. A representative for Aramco declined to comment. The Saudi government’s Center for International Communication didn’t immediately respond to an email requesting comment.

A representative for Reliance said the company does not have anything to add beyond Ambani’s comments at the shareholders’ meeting in June, when the conglomerate appointed Aramco Chairman Yasir Al-Rumayyan to the board. Ambani had said Reliance could finalize an investment deal with the oil producer this year.

Aramco said last week it was doing due diligence on the deal and that it should be completed this year.

 

This story has been published from a wire agency feed without modifications to the text. Only the headline has been changed.

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