Saudi Industrial Investment Group (SIIG) and National Petrochemical Co. (Petrochem) received approval, on Sept. 17, from their respective board of directors to start initial discussions to study the economic feasibility of merging the two companies.
The companies said in separate bourse statements that no agreement has yet been reached on the final structure of the potential deal.
The firms also noted that entering into this study does not necessarily mean that the deal will take place between the two parties.
If the deal is agreed upon, it will be subjected to the conditions and approvals of the competent authorities, and the approval of the extraordinary general assembly of both companies.
Both the companies indicated that any material developments will be announced later.
According to data compiled by Argaam, SIIG owns 50% of Petrochem.
Petrochem manufactures petrochemicals such as ethylene, polyethylene, hexane, propylene, polypropylene and polystyrene.
The activity is currently limited to its investment in its 65% owned subsidiary, Saudi Polymers, the company's first project, with a capital of SAR 4.8 billion.
SIIG is involved in the production of gasoline and styrene through its joint venture with Chevron Phillips, in addition to owning a 50% stake in Petrochem, with a capital of SAR 4.5 billion.
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