RIL-Aramco mega deal faces valuation hurdles

Differences over the valuation of the refining and petrochemicals business of Reliance Industries Ltd (RIL) is likely to prolong a potential mega deal between India’s largest private sector company and the world’s top crude oil producer, Saudi Arabian Oil Co. (Aramco), said two people, requesting anonymity.

The deal was announced last August by RIL chairman and managing director Mukesh Ambani, wherein Aramco was to pick up a 20% stake in the company’s oil and chemicals business for $15 billion, at an enterprise value of $75 billion.

However, an agreement is yet to be signed between the two companies. Last month, Ambani had informed shareholders at the annual general meeting that due to the unforeseen circumstances in the energy market, the Aramco deal has not progressed as per the original timeline.

On Sunday, Aramco president and chief executive Amin Nasser said work on the RIL deal is on and they will update shareholders in due course.

“The impact of crude oil prices on Saudi Aramco’s balance sheet is visible. It wants a market to place its crude, but it is not desperate. And, so is not RIL to sell a stake. So, both companies are looking at a commercial deal which is a win-win for both,” said the first official cited above.

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