(BLOOMBERG) – Saudi Industrial Investment Group and National Petrochemical Co. started talks to merge, potentially creating a firm with US$11 billion (S$15 billion) in assets as Middle Eastern energy companies assess their options in a lower oil-price environment.
The talks are at an initial stage, and no agreement has been reached, the companies said Sunday (Sept 20).
Saudi Industrial owns 50 per cent of National Petrochemical.
National Petrochemical’s shares jumped as much as 9.6 per cent, rising to the highest level since 2014, valuing the company at almost 15 billion riyals (US$4 billion).
Their possible merger comes as energy companies in countries such as Saudi Arabia, Qatar and the United Arab Emirates restructure their operations to cope with a market that’s under strain from lower demand amid the coronavirus pandemic.
Recent examples of consolidation in the kingdom’s chemical industry include Saudi International Petrochemical’s completion last year of a buyout of Sahara Petrochemical.
That was followed by Saudi Aramco buying a majority stake in the largest Saudi chemical maker in a deal that was valued at about US$70 billion.
Source: Read Full Article