RIL shares jump on report of Aramco being in advanced talks for $25 billion deal

Shares of Mukesh Ambani-owned Reliance Industries Limited (RIL) surged more than 2% higher to ₹2,197 per share on the BSE in Monday's deals after a report by Bloomberg suggested that Saudi Aramco is in advanced talks for an all-stock deal to acquire a stake in Reliance's oil refining and chemicals business. 

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 report further added that an agreement could be reached in the coming weeks. Details of the potential transaction are still being negotiated, and talks could drag on longer or fall apart, sources told Bloomberg.

Addressing the shareholders in its 44th Annual General Meeting (AGM) in June, RIL had said that it hopes to formalise its partnership with Saudi Aramco by the end of 2021. Meanwhile, Yasir Al-Rumayyan, chairman of Saudi Aramco and the Governor of the Public Investment Fund, joined the board of Reliance Industries as an independent director.

The oil-to-retail-to-telecom conglomerate had in 2019 announced its interest to sell 20% stake in the company’s flagship chemicals and refining business to Saudi Arabian oil company Saudi Aramco in a deal valued at $15 billion. The deal was to conclude by March 2020 but was delayed and the talks revived this year.

Speaking at the AGM, RIL's Chairman and Managing Director Mukesh Ambani had said that "as an important part of this vision of achieving accelerated growth, we look forward to welcoming Saudi Aramco as a strategic partner in our O2C business." Despite several challenges due to covid-19, "we have made substantial progress in the past year in our discussions", he added.

Last fiscal, RIL carved out its oil-to-chemicals business into a separate entity, to facilitate onboarding of strategic partners like Aramco. O2C undertaking of the company comprises of entire oil-to-chemicals business consisting of refining, petrochemicals, fuel retail & aviation fuel (majority interest only) and bulk wholesale marketing businesses together with its assets and liabilities.