(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 Sunday. Saudi Industrial owns 50% 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 a.m. in Riyadh.
Their possible merger comes as energy companies in countries such as Saudi Arabia, Qatar and the United Arab Emirates 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.
(Updates share prices in third paragraph and in chart.)
For more articles like this, please visit us at bloomberg.com
©2020 Bloomberg L.P.
Gallery: Meet the 15 richest people in Africa, who have a collective net worth of over $73 billion (Business Insider)