Saudi International Petrochemical Co (Sipchem) and Sahara Petrochemical “plan to target acquisitions and joint ventures in the United States and Asia when their merger is completed in order to expand market reach,” Reuters reports, citing top executives.
Sipchem signed a non-binding agreement to buy Sahara Petrochemicals Company in a deal valued at 8.25 billion riyals ($2.2 billion) in October, four years after merger talks stalled. Once fully merged, the company plans on “looking at opportunities in Asia and U.S. markets for either acquisition or organic growth, JVs, and locally we are also exploring,” said Sipchem CEO Abdullah Al-Saadoon, who will be the new company’s COO, said.
“The transaction comes in line with Vision 2030 goals to build national companies with strong local and international reach in a sector that has been identified as a priority for the future Saudi economy,” Sahara CEO Saleh Bahamdan, who will be CEO of the new entity, said according to Reuters.
Sahara produces basic petrochemicals while Sipchem focuses on more high-value products. The tie-up will expand their product portfolio, increase purchasing power and reduce raw material costs, boosting competitiveness and sustainability, Reuters reports.
Both Sipchem and Sahara have the Zamil Group, one of the kingdom’s most prominent family businesses, as a significant shareholder, along with the Saudi Arabian government.