Saudi Arabia's SIIG and Petrochem plan merger through share exchange

Supreme Petrochem

28/09/2021 07:14

DUBAI, Sept 28 (Reuters) - Saudi Arabian petrochemicals
companies Saudi Industrial Investment Group (SIIG)  2250.SE  and
the National Petrochemical Company (Petrochem)  2002.SE  said on
Tuesday they had signed a non-binding agreement on a proposed
merger.
    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 bourse statements.
    SIIG would pay Petrochem's shareholders by issuing new
shares in SIIG, which would result in a delisting of Petrochem's
shares.
    Petrochem's shareholders would receive 1.27 shares in SIIG
in exchange for each share they owned in Petrochem.
    SIIG has appointed HSBC Saudi Arabia as its financial
advisor while Petrochem is working with GIB Capital.
    The non-binding memorandum of understanding was subject to
the companies reaching a final agreement on the terms of the
deal, SIIG said.
    The two firms began talks last year over the merger, which
would mark further consolidation in the Saudi 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 capitalisation of about $6.3 billion
and SIIG of about $4.8 billion. 
    The Saudi government has a 13.1% stake in SIIG and a 25%
stake in Petrochem, according to Refinitiv data. 
    
    ($1 = 0.2666 riyals)

 (Reporting by Davide Barbuscia; Editing by Stephen Coates)
 ((Davide.Barbuscia@thomsonreuters.com; +971522604297; Reuters
Messaging: davide.barbuscia.reuters.com@reuters.net))