Saudi Arabia’s Saudi International Petrochemical (Sipchem) and Sahara Petrochemical plan to focus on acquisitions and joint ventures in Asia and the US, after their merger is completed. This in turn will help them to boost their market reach, Reuters reported.
Sahara CEO Saleh Bahamdan will also be the chief executive officer of the new merged unit. He said, “Combining Sipchem and Sahara will create an integrated petrochemical leader with an improved competitive position in Saudi Arabia and globally.”
The merged entity will be called Sahara International Petrochemical Company. It will combine assets worth more than $5.9 billion. Based on the entity’s valuation, it will rank second after the Kingdom of Saudi Arabia’s biggest petrochemicals firm, Saudi Basic Industries
Both companies will ensure a shared organisational structure including human resources, IT, finance, maintenance, and technical services.
Sipchem CEO Abdullah Al-Saadoon will be the entity’s chief operating officer. “We are looking at opportunities in Asia and US markets for either acquisition or organic growth, JVs, and locally we are also exploring,” Sipchem said.
The entity’s growth opportunities and future plans will be identified after the entity’s management and board are appointed, both executives told Reuters in an interview. Shareholders of both firms will schedule separate meetings on May 16 to vote on the merger. This will be the last before its completion.
Bahamdam said that they will be able to scale procurements and strengthen cross-selling through 24 companies with associates offering 30 unique petrochemical products.