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Bloomberg
Saudi Industrial Investment Group and National Petrochemical Co. started talks to merge, potentially creating a firm with $11 billion in assets as Middle Eastern energy companies assess their options in a lower oil-price environment.
The talks are at an initial stage, and no agreement has been reached, the companies said on Sunday. Saudi Industrial owns 50 percent of National Petrochemical.
National Petrochemical’s shares jumped as much as 9.6%, rising to the highest level since 2014, valuing the company at almost 15 billion riyals ($4 billion). Saudi Industrial was 4.9% higher at 10:29 am in Riyadh.
Their possible merger comes as energy companies restructure their operations to cope with a market that’s under strain from lower demand amid the coronavirus pandemic.
Recent examples of consolidation in the kingdom’s chemical industry include Saudi International Petrochemical Co.’s completion last year of a buyout of Sahara Petrochemical Co. That was followed by Saudi Aramco buying a majority stake in the largest Saudi chemical maker in a deal that was valued at about $70 billion.