Sipchem, Sahara eye acquisitions in US, Asia after merger

Saudi International Petrochemical Co (Sipchem) and Sahara Petrochemical Co. are targeting acquisitions and joint ventures in the United States and Asia when after completing their proposed merger to expand market reach, Reuters reported on Tuesday citing top executives from both companies.

“We are looking at opportunities in Asia and U.S. markets for either acquisition or organic growth, JVs, and locally we are also exploring,” said Sipchem CEO Abdullah Al-Saadoon, who will be the new company’s chief operating officer.

Growth opportunities will be evaluated and prioritized after the combined entity’s management and board are appointed, both executives told Reuters in an interview, without giving further details.

“Combining Sipchem and Sahara will create an integrated petrochemical leader with an improved competitive position in Saudi Arabia and globally,” said Saleh Bahamdan chief executive officer of Sahara and the new entity.

Shareholders of the two firms will hold separate meetings on May 16 to vote on the merger.

In December 2018, Sahara and Sipchem entered into a legally binding agreement governing the terms and conditions for implementing a business merger of equals, Argaam reported.

Potential synergies from merger are likely to reach SAR175-225 million per annum on the earnings before interest, tax, depreciation and amortization (EBITDA) level.