SAUDI ARABIA: Sahara Petrochemical, Sipchem suspend plans for proposed business merger

"The companies reached a conclusion that it is difficult to implement this merger under the current regulatory framework using a structure acceptable to both companies, where both companies will continue to exist whilst achieving operational integration," Sahara and Sipchem said in an announcement to the Tadawul (Saudi Stock Exchange).

As a result, both companies have decided to postpone commercial negotiations and entry into a merger and to stop the exchange of information "for the time being."

A merger agreement had been expected to be signed during the first half of this year.

Sahara and Sipchem may revive plans in the future, if both companies can agree on a structure that would benefit their shareholders.

However, "at this stage they have agreed to pursue their business and strategic objectives independently of each other and without liaising with each other," the announcement added.

Source: Weekly "PetroChemical News", Durham, NC, USA; 16 June 2014
(Syed Rashid Ali, Karachi, Pakistan)