Sipchem-Sahara merger to get final CMA approval in February, says CEO

The Capital Market Authority (CMA) is set to give final approval on the planned merger of Saudi International Petrochemical Co. (Sipchem) and Sahara Petrochemical Co. by the end of February 2019, Sipchem’s CEO Ahmad Al-Ohali told CNBC Arabia.

The merger is expected to have a positive impact on the two firms, as well as the petrochemical industry in general, he said.

The market value of the two companies will reach SAR 16 billion, he said.

The merger will benefit both firms by reducing cost, increasing revenue and profitability, which will add value to shareholders, he said, adding that there will be a great growth opportunity in and outside of the Kingdom.

As for the planned shutdown of its methanol plant, Al-Ohali said that the eight-week halt aimed to raise reliability, efficiency and production capacity.

The plant has returned to full operations about four days ago, and its financial impact is expected to reflect on results in December and the coming years.

The same step will be taken concerning other plants as well over the coming two years.

Sipchem’s strategy is to raise efficiency, especially after the merger with Sahara, as well as other mergers in the Kingdom.

“We expect growth in the petrochemical sector to stay strong in 2019,” he said.

On October 3, Sipchem and Sahara signed a non-binding memorandum of understanding (MoU) to carry out a merger, whereby Sipchem will fully acquire Sahara via share swap, Argaam previously reported.