Sahara Petrochemicals and Sipchem to Resume Merger Talks

Sahara Petrochemicals has announced that it is planning to resume discussions with Saudi International Petrochemical (Sipchem) in a move that could create a chemicals company worth nearly $4 billion.

The companies called off their proposed merger in June 2014, blaming the Kingdom’s inadequate regulatory framework for the collapse of the deal, which had progressed to an advanced stage by December 2013 when they both signed a Memorandum of Understanding. This would have seen Sipchem taking on the role of corporate parent to Sahara.

Sahara said talks could resume “in light of the recent changes in the regulatory framework”, without giving any further details. It added that it would make further announcements on relevant developments at an appropriate time.

The Zamil Group, one of Saudi Arabia’s prominent family businesses, is a significant shareholder in both Sahara Petrochemicals and Sipchem, along with the government.

Sahara Petrochemicals’ and Sipchem’s manufacturing plants are mostly based in Jubail. Sahara is focused on ethylene, PE, propylene and PP, while Sipchem produces methanol, butanediol, tetrahydrofuran and carbon monoxide as well as several acetyls products such as acetic acid/anhydride and vinyl acetate monomer (VAM).