Saudi Industrial, Petrochem postpone merger plans
Saudi Industrial Investment Group (SIIG) and its unit National Petrochemical Co (Petrochem) have delayed a planned merger until at least the end of 2011 when a joint venture starts production.
The merger, which SIIG said in April was expected to be completed within nine months, would create the third largest petrochemical firm in Saudi Arabia after Saudi Basic Industries(SABIC) and Saudi Kayan Petrochemical Co.
The merger will be postponed until Saudi Polymers, a joint venture of Petrochem and Chevron Philips Chemical Co, starts up and reaches stable production, the two Saudi companies said in a statement on the bourse website on Monday.
Saudi Polymers is expected to start production during the fourth quarter of this year, the statement said.
Chevron Phillips Chemical is a joint venture of US-based energy firms Chevron and ConocoPhillips.
SIIG said in April it expects its production to rise to 6 million tons per year after Petrochem’s $5.4 billion joint-venture with Chevron Philips begins production.
SIIG currently owns 50 percent of Petrochem.
SABIC is the world’s largest petrochemical company based on market capitalization.
Shares of SIIG closed 0.8 percent lower on Saudi Arabia’s bourse and Petrochem edged 0.4 percent higher before the statement was issued.