Sipchem and Sahara Petchem to resume merger talks

Sipchem and Sahara Petchem to resume merger

Saudi Arabia’s Saudi International Petrochemical Co (Sipchem) and Sahara Petrochemical are said to be planning to resume proposed merger talks in a deal that could create a US$3.9 billion chemicals company, according to a report by Reuters.

The two companies called off a planned merger in 2014, which comprised a share swap, citing an inadequate regulatory framework in the country.

Now, nearly four years later, following recent changes in the mergers and acquisitions (M&As) regulatory framework, Sahara said in a filing to the country’s stock exchange, Tadawul, that it would resume talks again.

It said that further announcements will be made on relevant developments at the appropriate time.

The proposed tie-up, which would create a firm with a market capitalisation of US$3.9 billion at current values, comes as consolidation gains momentum in the Saudi corporate sector.

Along with the Saudi government, both Sipchem and Sahara Petrochemical are part of the Al-Zamil Holding Group, which is the biggest shareholder of both companies, with 9.7% share of Sipchem and 7.9% share of Sahara. Al-Zamil is the one of the country’s most prominent family-owned businesses.

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