Saudi Arabia plans to merge SIIG and Petrochem via share swap


DUBAI, Sept. 28 (Reuters) – Saudi petrochemical companies Saudi Industrial Investment Group (SIIG) (2250.SE) and National Petrochemical Company (Petrochem) (2002.SE) announced on Tuesday that they had signed a non-proposed merger agreement.

The deal would consist of a share exchange offer made by SIIG to acquire the remaining 50% of Petrochem that SIIG did not already own, the companies said in separate stock market releases.

SIIG would compensate Petrochem shareholders by issuing new shares in SIIG, which would result in delisting of Petrochem shares.

Petrochem shareholders would receive 1.27 SIIG shares in exchange for each share held in Petrochem.

SIIG has appointed HSBC Saudi Arabia as its financial advisor while Petrochem is working with GIB Capital.

The non-binding MoU was conditional on the companies reaching a final agreement on the terms of the deal, SIIG said.

The two companies began talks last year over the merger, which would mark further consolidation in Saudi Arabia’s petrochemicals sector, after oil giant Saudi Aramco (2222.SE) bought a 70% stake in Saudi Basic Industries ( 2010.SE) last year.

Petrochem has a market capitalization of approximately $ 6.3 billion and SIIG of approximately $ 4.8 billion.

The Saudi government owns a 13.1% stake in SIIG and a 25% stake in Petrochem, according to data from Refinitiv.

($ 1 = 0.2666 riyal)

Reporting by Davide Barbuscia; Editing by Stephen Coates

Our Standards: Thomson Reuters Trust Principles.

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