October 15, 2018 [Tank News International] - Saudi International Petrochemical Company (Sipchem) has signed a non-binding agreement to buy Sahara Petrochemicals Company in a deal valued at just over $2bn. The agreement has taken place four years after merger talks stalled.
Aligned with the goals of Saudi Vision 2030, which aims to create a thriving private sector in the Kingdom, the merger is expected to deliver multiple strategic benefits to the combined business, including:
- Strengthening the product portfolio, diversifying feedstock supply and building out presence along the value chain;
- Increasing scale and resilience in the evolving petrochemicals sector, both in the Kingdom and internationally;
- Building on the competitive advantages and complimentary capabilities of Sahara and Sipchem to provide benefits commercially, operationally and functionally;
- Driving efficiency and productivity of the closely situated industrial asset portfolios of each of Sahara and Sipchem in Jubail; and
- Creating a platform with improved financial resources, capital market access, and product and technological expertise to take advantage of local and international growth opportunities, both organic and inorganic.
The Proposed Transaction is expected to provide synergy potential, from both a revenue and cost perspective, which is expected to drive value for shareholders. It is also expected to deliver benefits to the combined workforce, and local and international business partners.
Sipchem will make an offer to buy all of Sahara’s shares and each Sahara shareholder will receive 0.8356 new Sipchem shares, the companies said. Sipchem and Sahara are working to enter a binding agreement by February 28.
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