Saudi Petrochem, SIIG sign non-binding agreement on proposed merger

Proposed exchange ratio is 1.27 of SIIG shares for each Petrochem share

  
A Saudi trader monitors stock information at ANB Bank in Riyadh, Saudi Arabia December 15, 2020.

A Saudi trader monitors stock information at ANB Bank in Riyadh, Saudi Arabia December 15, 2020.

REUTERS/Ahmed Yosri

Saudi Arabia’s National Petrochemical Co. (Petrochem) and Saudi Industrial Investment Group (SIIG) have entered a non-binding agreement for the proposed merger, first announced in September 2020

The signed memorandum of understanding (MoU) covers the share exchange ratio and the structure through which the potential merger will be implemented.

According to a bourse filing to the Saudi Stock Exchange ( Tadawul) on Tuesday, SIIG would offer to acquire all of Petrochem’s issued shares.  Petrochem’s shares would then be delisted and become wholly owned by SIIG, which mainly invests in the petrochemical sector. 

The proposed exchange ratio is 1.27, whereby Petrochem’s shareholders will receive 1.27 shares in SIIG in exchange for each share they own in Petrochem, the statement said. 

The two petrochemical companies first announced their intent to merge in September 2020.  A feasibility study was completed in April.

SIIG already has a 50 percent stake in Petrochem. The merger is expected to create a company with around $9.4 billion in assets.

(Writing by Brinda Darasha; editing by Cleofe Maceda) 

brinda.darasha@refinitiv.com 

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