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SIIG, Petrochem decided to commence reciprocal on merger

April 19/2021

MOSCOW (MRC) -- Saudi Industrial Investment Group (SIIG) and National Petrochemical Co. (Petrochem) decided to commence reciprocal due diligence on merger following the completion of the initial economic feasibility study, the companies said in separate statements to Tadawul on April 15, 2021, said Argaam.

The companies will also negotiate the terms and conditions and share information regarding the proposed transaction.  SIIG appointed HSBC Saudi Arabia as financial advisor and Khoshaim & Associates as legal advisor concerning the proposed transaction.

On the other hand, Petrochem appointed GIB Capital as financial advisor and Abuhimed Alsheikh Alhagbani Law Firm as legal advisor. The companies aim to meet the requirements of the proposed merger before year-end, as well as present the proposed deal to their respective shareholders under applicable laws and regulations. The completion of the proposed merger is subject to several conditions, including obtaining approvals from the competent authorities.

SIIG and Petrochem are under no obligation to proceed with the proposed transaction, the statement noted. Therefore, the commencement of due diligence does not necessarily mean that the parties will reach a final and binding agreement or complete the proposed deal.

It is not possible to determine the events expected completion date and associated costs as it is subject to discussions between the companies and the due diligence results, the statements stated, adding any material developments will be disclosed in due course. 

SIIG owns 50% of Petrochem. In September 2020, SIIG and Petrochem received approval from their respective boards to start initial discussions to study the economic feasibility of a merger.

Ethylene and propylene are feedstocks for producing polyethylene (PE) and polypropylene (PP).

According to MRC's ScanPlast report, Russia"s estimated PE consumption totalled 241,030 tonnes in January 2021 versus 217,890 tonnes a year earlier. Only shipments of low density polyethylene (LDPE) and high density polyethylene (HDPE) increased. At the same time, PP shipments to the Russian market reached 141,870 tonnes in January 2021 versus 123,520 tonnes a year earlier. Supply of homopolymer PP and PP block copolymers increased.
Author:Anna Larionova
Tags:petroleum products, crude oil, PP, PE, neftegaz, petrochemistry, Saudi Arabia.
Category:General News
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