SIIG and Petrochem in discussions on possible merger
Saudi Arabian petrochemicals companies Saudi Industrial Investment Group (SIIG) and the National Petrochemical Company (Petrochem) are in discussions over a potential merger. The companies say their boards have approved initial discussions between the companies to study the “economic feasibility” of a possible merger. No agreement has been reached on the final structure of any merged business, the companies add.
SIIG owns 50% of Petrochem but the two companies are similar in size, suggesting a deal would be a merger of near equals.
The two companies previously held merger discussions in 2011, with those talks eventually postponed to allow Petrochem’s petchem facility at Jubail to reach production capacity and provide better valuations of the companies, SIIG said at the time.
SIIG was established in 1996 and Petrochem was formed in 2008.
The two companies had combined assets of US$9.5 billion as of June, Refinitiv data shows. SIIG had total assets of US$5.12 billion at the end of June while Petrochem had 16.4 billion riyals in total assets.
Petrochem, whose market capitalisation is US$3.7 billion, has a larger market value than SIIG.
A deal would mark further consolidation in the Saudi petrochemicals sector after oil giant Saudi Aramco bought a 70% stake in Saudi Basic Industries (Sabic) this year while Saudi International Petrochemical Co. (Sipchem) acquired Sahara Petrochemical Co last year.