(MENAFN) Sahara Petrochemical Company has signed a memorandum of understanding with Saudi International Petrochemical Company (Sipchem) for continuing the non-binding negotiations related to the detailed terms of a proposed merger of equals, according to Saudi Gazette.
In a note posted on the Tadawul website, it said the agreement was done on Wednesday, which came as a result of the preliminary conclusions of the studies and negotiations in relation to the proposed merger.
Both companies have agreed that, in the event the proposed merger occurs, it will be implemented by way of an exchange of shares where, after the proposed merger is completed, the company will become a subsidiary of Sipchem. Under the terms of the proposed merger, Sipchem will issue 0.685 new shares for every one issued share in the company.
Under the MoU, Sahara and Sipchem have agreed to continue to cooperate with each other to complete the financial, technical, commercial, market and legal due diligence, agree an integration plan, and the governance and strategy of the combined group as well as the preparation of the definitive documentation required to implement the proposed merger.