Petchem duo Sahara, Sipchem mull merger
Riyadh, June 4, 2013
Saudi Arabia's Sahara Petrochemical and Saudi International Petrochemical Co (Sipchem) said on Tuesday they had begun initial talks on a potential merger.
The Zamil Holding Company Group, one of the kingdom's most prominent family businesses, is a major shareholder in both companies.
A feasibility study will be carried out by the two companies over the next five months, with the plan then put to shareholders and the regulator for approval, separate statements from both companies to the Saudi stock exchange said.
No value for the potential merger was given.
Zamil, which has interests in petrochemicals, steel, housing, construction and other industrial sectors, owns 7.9 percent of Sahara and 9.6 percent of Sipchem. The government pension fund also has holdings of more than 5 percent in both companies.
Sipchem announced a fall in first-quarter net profit by nearly 60 percent year-on-year to 64.5 million riyals ($17.2 million) in April, which it attributed to planned plant shut-downs for maintenance. Sahara's net income in the same period tripled to 142 million riyals.
Sipchem makes methanol, butanediol, tetrahydrofuran, acetic acid, acetic anhydride, vinyl acetate monomer, as well as carbon monoxide, its website says. Sahara makes propylene, polypropylene, ethylene and polyethylene. - Reuters