Talks to merge two Saudi petrochemical companies, which had been frozen for nearly 10 years, have resumed.
Saudi Industrial Investment Group (SIIG) and the National Petrochemical Company (Petrochem) announced Sunday that they have begun talks over a potential merger.
The SIIG and Petrochem boards have approved initial discussions to study the feasibility of a merger but no agreement has been reached on any final structure of a merged entity, the companies said in separate statements.
They pointed out that if a deal is reached, it will be subject to the conditions and approvals of competent authorities, as well as the extraordinary general assembly of both companies.
SIIG owns 50 percent of Petrochem, but the two firms are similar in size, suggesting a deal would be a merger of near equals.
The two companies previously held merger discussions in 2011, with the talks eventually postponed to allow Petrochem’s facility at Jubail to reach production capacity and provide better valuations of the companies, SIIG said back then.
The Riyadh-based Petrochem has paid-up capital of SAR4.8bn riyals. It owns 65 percent of the Saudi Polymer Co, which permanently closed down its polystyrene (PS) manufacturing plant at the Jubail petchems complex in July and produced petrochemical products.
Arabian Chevron Phillips Petrochemical Co., wholly owned by CPChem, owns the remainder of Saudi Polymers Co.