Reliance Industries Ltd (RIL) and Saudi Aramco have mutually decided to re-evaluate a major investment proposal concerning the O2C [Oil to Chemicals] business of RIL. The deal was estimated to be about $15 billion.
“Due to the evolving nature of Reliance’s business portfolio, Reliance and Saudi Aramco have mutually determined that it would be beneficial for both parties to re-evaluate the proposed investment in O2C business in light of the changed context,” RIL said in a late night statement on November 19.
“Consequently, the current application with NCLT for segregating the O2C business from RIL is being withdrawn,” the statement added.
Both companies had signed a non-binding Letter of Intent in August 2019 for a potential 20% stake acquisition by Saudi Aramco in the O2C Business of RIL.
Over the past two years, both the teams made significant efforts in the process of due diligence, despite Covid restrictions, RIL said.
RIL said it recently unveiled its plans for the new energy & materials businesses by announcing the development of Dhirubhai Ambani Green Energy Giga Complex at Jamnagar.
It will be among the largest integrated renewable energy manufacturing facilities in the world.
The Four Giga Factories part of the complex will include an integrated solar photovoltaic module factory for production of solar energy, an advanced energy storage battery factory for storage of intermittent energy, an electrolyser factory for production of green hydrogen and a fuel cell factory for converting hydrogen into motive & stationary power, RIL said.
“Jamnagar, which accounts for a major part of the O2C assets, is envisaged to be the centre for Reliance’s new businesses of Renewable Energy & New Materials, supporting the Net Zero commitment,” the company said, justifying the reason behind the decision to cancel talks.
It said the deep engagement over the last two years has given both Reliance and Saudi Aramco a greater understanding of each other, providing a platform for broader areas of cooperation.
“Saudi Aramco and Reliance are deeply committed to creating a win-win partnership and will make future disclosures as appropriate,” it said.
“RIL shall continue to be Saudi Aramco’s preferred partner for investments in the private sector in India and will collaborate with Saudi Aramco & SABIC for investments in Saudi Arabia,” it added.
“Both companies are committed to collaborate and work towards strengthening the relationship further in the years ahead,” it further said.