Picture: REUTERS/SERGEI KARPUKHIN
Picture: REUTERS/SERGEI KARPUKHIN

Riyadh — Saudi Industrial Investment Group and National Petrochemical Company started talks to merge, potentially creating a firm with $11bn in assets as Middle Eastern energy companies assess their options in a lower oil-price environment. The shares climbed.

The discussions are at an initial stage and no agreement has been reached, the companies said on Sunday. Saudi Industrial owns 50% of National Petrochemical, and they had attempted a merger nine years ago.

National Petrochemical’s shares closed at the highest level since 2014, giving it a market value of about 15-billion riyals ($4bn). Saudi Industrial ended 5.5% higher in Riyadh.

The 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.

In 2019, Saudi International Petrochemical  completed a buyout of Sahara Petrochemical. That was followed by Saudi Aramco buying a majority stake in the largest Saudi chemical maker in a deal that was valued at about $70bn.

Bloomberg 

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