Sipchem to resume merger talks with Sahara

Saudi International Petrochemical Company (Sipchem) on Tuesday said it will resume discussions with Sahara Petrochemicals Company (Sahara) following the recent changes in merger and acquisition (M&A) regulatory framework, the company said in a statement to Tadawul.

Relevant developments will be made public at an appropriate time, it added.

The two companies signed a non-binding memorandum of understanding to start talks for a potential merger in December 2013. However, the negotiations were called off in June 2014, citing “inadequate regulatory framework.”

In October last year, Saudi Arabia’s market regulator, the Capital Market Authority, approved updated regulations for mergers and acquisitions among Saudi-listed companies to encourage M&As.

On Monday, Sjoerd Leenart, global and regional head of corporate banking at JPMorgan Chase said initial public offerings (IPOs) and merger and acquisitions (M&As) will drive Middle East deals this year, led by Saudi Arabia and the UAE.

The notable merger deals include Saudi British Bank and Alawwal Bank deal, and Al Hammadi Company for Development & Investment and National Medical Care Co. which started last year. No agreement has been reached in the two deals so far.