Sipchem-Sahara share-swap merger agreement to create a US$5 bln company

05-Dec-13

Saudi International Petrochemical Co. (SIPCHEM) expects to sign a share-swap merger agreement with Sahara (SPC) Petrochemicals Co. in the first half of next year, seeking to create a company with about US$5 billion in market value, as per Bloomberg. Saudi International Petrochemical will issue 0.685 new shares for every one of Sahara under the terms of the proposed merger. The two signed a memorandum of understanding to start due diligence and continue the non-binding talks. Sipchem will issue 300.6 million new shares to Sahara shareholders. The companies’ proposed merger comes as Saudi Basic Industries Corp., the world’s biggest petrochemicals maker by market value, seeks investment opportunities in the U.S. State-run General Retirement Organization and Al Zamil Holding Group are shareholders in both Sipchem and Sahara, according to data compiled by Bloomberg.“The combined business is expected to result in significant synergies related to operational efficiencies and the combined company would become a stronger platform for further growth in the long-term,” according to the statement.