Saudi Industrial Investment Group (SIIG) and the National Petrochemical Company (Petrochem) have decided to start discussions on a potential deal to merge the two companies.

The SIIG and Petrochem boards have approved initial discussions to study the economic feasibility of merging the two companies, but no agreement has yet been reached on the final structure of the potential deal, the companies said in separate statements.

If the deal is agreed upon, this will be subjected to the conditions and approvals of the all regulators, and the approval of the extraordinary general assembly of both companies.

SIIG owns 50 per cent of Petrochem.

SIIG was established as a joint stock company according to kingdom regulations in 1996. The capital increased through profit capitalisation, and underwriting of rights issue since the company’s capital has reached SR4.5 billion ($1.2 billion).

Petrochem is a Saudi Joint Stock Company listed on the Saudi stock exchange. The company was established in 2008 with a current paid-in-capital of SR4.8 billion ($1.28 billion).

Petrochem main business is investing in the petrochemical industry; by utilizing its strategic partnerships and the Kingdom’s natural resources. Petrochem owns 65 per cent of the Saudi Polymer Company, Located in Jubail Industrial City, where the construction of this project cost more than SR20 billion and produces more than 1.7 million tonnes per year of polymers.