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SIBUR and TAIF finalise terms of merger

September 27/2021

MOSCOW (MRC) -- SIBUR and TAIF have entered into an agreement finalising the creation of a combined entity that will leverage the facilities of PJSC SIBUR Holding and create the largest petrochemical company in Russia and one of the biggest in the world.

Under the agreement, TAIF shareholders will receive a 15% stake in the new combined company in exchange for 50% plus 1 share in JSC TAIF. To ensure faster integration and higher efficiency of the combined entitys operations and investment programme, the parties have agreed on an early exercise of an option for the remaining stake of TAIFs shareholders. SIBURs financial obligations in the second phase of the transaction will be secured by several issues of exchange-traded bonds. As a result, in a matter of days required to finalise the deal the combined entity will consolidate 100% of the shares of TAIF Group, which includes petrochemical and energy companies.

The new company will support Russias leadership in the chemical, petrochemical and oil & gas sectors while making the countrys products more globally competitive thanks to economies of scale, higher production efficiency, better sales processes and improved customer service in line with global best practices.

Following the completion of all ongoing investment projects, the new combined company will be among the top 5 producers of polyolefin and rubber globally. The companys investment programme will yield further growth of chemical non-commodity exports and import substitution, and also unlock new ways of tackling sustainability and environmental challenges.

The deal brings together the two companies vast expertise in major investment projects and facilitates efficient distribution of feedstock, which will boost Tatarstan's petrochemical cluster and pave the way for new partnerships with the region.

Earlier it was reported that the European Commission on September 2 received a notice of the deal concerning the merger of SIBUR and TAIF. Upon preliminary examination, the commission concludes that the declared transaction may be subject to the Merger Regulation. However, the final decision on this matter has been postponed.

As MRC reported, on 23 April of this year, SIBUR announced a merger with TAIF by exchanging 15% of its shares for 50% + 1 share in TAIF. The scope of the transaction includes only TAIF's petrochemical and generating companies. TAIF together with SIBUR will spend more than 1 trillion rubles. for the implementation of joint projects. In total, the companies plan to implement over 30 projects. According to figures provided by SIBUR, the joint entity would produce 8.1m tonnes/year of polyolefins, when including upcoming capacities in their Amur GCC and EP-600 large-scale projects.

TAIF JSC is the parent company of the largest non-public group in the Russian Federation. The group's netted revenue over the past 12 months amounted to more than Rb720 bn. TAIF plans to enter the production of commercial products in the amount of more than Rb1.7 trln by 2035. per year, for this planned investment of Rb1.8 trln for the next 15 years.

SIBUR manufactures and sells petrochemical products on the Russian and international markets in two business segments: olefins and polyolefins (polypropylene, polyethylene, BOPP, etc.), as well as plastics, elastomers and intermediate products (synthetic rubbers, expanded polystyrene, PET, etc.)
Author:Anna Larionova
Tags:ABS, petroleum products, PP, PS, PE, neftegaz, petrochemistry, Taif, Kazan, Kazanorgsintez, Nizhnekamskneftekhim, Sibur Holding, Russia.
Category:General News
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