RIYADH: Saudi International Petrochemical Company (Sipchem) and Sahara Petrochemicals Company (Sahara) have reached the finalized details of the business merger of equals between the two companies.
The transaction will be implemented by Saudi International Petrochemical Company (Sipchem) making an offer to acquire all of the Sahara Petrochemicals Company (Sahara) shares in exchange for the issue of the new Sipchem shares, a notice sent to Tadawul said.
Based on the exchange ratio, the total consideration payable by Sipchem to Sahara shareholders will be the issue of 366.666 million new Sipchem shares. Hence, for every one (1) Sahara share: 0.8356 new Sipchem shares will be issued.
The Transaction will result in Sipchem having an increased share capital of 733.333 million Sipchem shares, of which 366.666 million Sipchem shares, representing 50 percent of Sipchem’s increased share capital, will be held by Sahara Shareholders and 366.666 million Sipchem shares, representing 50 percent of Sipchem’s increased share capital, will be held by Sipchem shareholders.
The transaction is expected to provide synergy potential, from both the revenue and cost perspective, which is expected to drive value for shareholders. It is also expected to deliver benefits to the combined workforce, and local and international business partners.
The consideration payable by Sipchem to Sahara Shareholders will be the issuance of the new Sipchem shares in accordance with the exchange ratio. The consideration payable by Sipchem does not include any cash payment.
Accordingly, it is not necessary for HSBC Saudi Arabia, acting as Sipchem’s independent financial adviser to confirm if Sipchem has sufficient resources available to it to satisfy the acceptance of the offer to acquire all the Sahara shares in full.
The name of the combined group shall be changed to Sahara International Petrochemical Company (Sipchem).[the_ad id=”31605″]