Yes! Aramco paid a premium for RIL deal, and with good reason


Yes! Aramco paid a premium for RIL deal, and with good reason

ET Intelligence Group: At a time when valuations of global refining and petrochemical companies are compressing and trading at mid-cycle valuation multiples, investors are seeking answers to Saudi Aramco’s decision of paying a premium for Reliance Industries’ (RILNSE 0.96 %) refinery and petrochemical assets.

The implied EV/EBITDA, based on the enterprise value of $75 billion, works out to be 7.2-8.3 times, while the global refinery and petrochemical stocks have a median of 7.02 times, according to Bloomberg.

Valero Energy, the world’s largest independent petroleum refiner with a combined throughput capacity of 3.1 million barrels per day, is trading at 5.37 times its projected 2020 earnings. RIL’s throughput capacity stands at 1.24 million barrels per day. Read More

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