Saudi Chemical Producers in Advanced Merger Talks

Plans for a merger between Saudi International Petrochemical Company (Sipchem) and Sahara Petrochemical are at an advanced stage, the two Saudi Arabian chemical producers said recently. The announcement followed what appeared to be a positive outcome of a five-month economic and technical feasibility study.

The companies, which have a common shareholder, Zami Holding Company Group, said they are still "progressing detailed studies and negotiations in relation to the potential merger" prior to submitting the plans to the respective boards for approval. A closing could come as early as the end of January 2014, when a non-binding agreement expires.

Sahara focuses on base petrochemicals ethylene and propylene, with their downstream products polyethylene and polypropylene. Sipchem's portfolio includes methanol, butanediol, tetrahydrofuran, carbon monoxide and a number of acetyls products such as acetic acid, acetic anhydride and vinyl acetae monomer (VAM).