Chemanol signs SAR 46.2 mln SPA to acquire 84% stake in ADDAR Chemicals

Logo of Methanol Chemicals Co. (Chemanol)

Methanol Chemicals Co. (Chemanol) signed a share purchase agreement (SPA) with the shareholders of ADDAR Chemicals Co. (ACC) to acquire an 84% stake in the latter for a SAR 46.2 million cash consideration, to be disbursed partially and within specified intervals, as per the terms stipulated in the SPA.

This disbursement is contingent upon meeting predefined performance indicators and achieving the targeted return on investment, as earlier agreed upon, according to a statement to Tadawul today, Nov. 12.

Chemanol said the acquisition is aimed at enhancing its market share in the specialty chemicals market and diversifying its product range, in line with its strategic expansion plans.

It underscored that this acquisition fortifies its business and product offerings, which are not affected by fluctuations in feedstock prices and economic cycles within the petrochemicals market.

The stake purchase would contribute to reducing ACC’s production costs by integrating its services with Chemanol's. Additionally, Chemanol will provide some necessary materials for ACC's production process, with some of the latter’s products to be merged with Chemanol's production operations, Chemanol further stated.

The anticipated completion date for this transaction is March 31, 2024. The SPA was signed following the conclusion of financial and legal due diligence, technical studies conducted by a specialty chemical company, and the financial plan prepared by a specialized financial advisor, the statement added.

In June, Chemanol signed two binding offers to acquire 84% of ADDAR Chemicals and 80% of Global Co. for Chemical Industries Ltd. (GCI), which were both later approved the General Authority for Competition (GAC) in September, according to data available on Argaam.

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