Saudi share swap builds petrochem behemoth

The Saudi Industrial Investment Group has offered to acquire the rest of National Petrochemical Co. in a share-swap, creating one of the largest petrochemical companies in the Middle East.

National Petrochem shareholders will receive 1.27 shares in Saudi Industrial in exchange for each share they hold, according to a statement. The transaction will value National Petrochem at 24 billion Saudi riyals ($6.4 billion).

The Saudi Industrial Investment Group, known as SIIG, already owns half of National Petrochemical. The companies started talks to merge, potentially creating a firm with $11 billion in assets.

The merger comes amid a boom in prices for chemicals and other petroleum products as major economies recover from the coronavirus pandemic. The stock of both companies is up almost 50 per cent this year.

Last year, Saudi International Petrochemical Co. bought Sahara Petrochemical Co. That was followed by Aramco taking a majority stake in Saudi Basic Industries Corp, the kingdom’s biggest chemicals maker, in a $69 billion deal.