Oman Chlorine announced on Wednesday that it has signed a non-binding Letter of Intent (LOI) to partner with Saudi Arabia’s Basic Chemical Industries (BIC) company to explore strategic partnership and investment in the Omani company’s UAE-based subsidiary Union Chlorine.
Dammam-headquartered BCI is the Kingdom’s largest privately owned chemical company, and is a top manufacturer of chlor-alkali, which is the main product of Abu Dhabi-based Union Chlorine.
In a statement to the Muscat Stock Exchange, Oman Chlorine said the LOI “aims to facilitate a preliminary understanding between the parties on the terms and conditions with respect to the strategic partnership and for investment in Union Chlorine LLC."
Oman Chlorine, through its subsidiary Oman Industrial Development Company, would divest up to 9 percent of its ownership in its UAE subsidiary with balance divestiture from minority shareholders in Union Chlorine.
The strategic partnership, according to the statement, aims to tap develop synergies between Oman Chlorine, Union Chlorine and BCI through a regional alliance.
The LOI, signed on 13 July, is valid for 90 days, the statement said, adding that BCI shall perform detailed commercial, legal, and financial due diligence to identify the benefits from the geography and product diversification.
In a separate stock exchange statement, BCI said it signed a non-binding LOI with the partners of Union Chlorine for acquisition of 49 percent ownership in the UAE company.
(Writing by SA Kader; Editing by Anoop Menon)
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