Sipchem and Sahara Merger Progresses
Sahara Petrochemicals has announced that its current CEO, Salah Mohammed Bahmdan, will head up the new group that will be formed from its merger with Saudi International Petrochemical (Sipchem). Abdullah Saif Alsaadoon, Sipchem’s CEO, will be appointed as chief operating officer of the combined company.
The companies disclosed last December that they had agreed to a merger of equals in a move they estimate to yield synergies of up to 225 million Saudi riyal, or $60 million, by the end of the third year after completion.
Synergies will be achieved by product cross-selling, an internal balancing of chemicals between co-located assets in Al Jubail, Saudi Arabia, and increased scale in common procurement spending, consolidated shipments and logistics.
The merger will be carried out via a share swap, in which all Sahara shares will be exchanged for new shares in Sipchem. The combined company will be named Sahara International Petrochemical and owned equally by both Sipchem and Sahara shareholders.
The transaction expected to be finalized by Jun. 30, 2019 will create Saudi Arabia’s second-largest non-SABIC related company, behind Petro Rabigh. The deal remains subject to regulatory and shareholder approval.
