Sahara and Sipchem to discuss potential merger

Sahara Petrochemical has entered into a non-binding agreement with Sipchem for potential merger, according to Tadawul website. “The time schedule for merger feasibility study is five months,” says Sahara.
This follows the announcement made by Sahara on June 4, 2013, regarding the initial understanding reached with Sipchem to jointly consider the economic and technical feasibility of both companies undertaking the potential merger.
Sahara announced on Tuesday that it entered into a non-binding framework agreement with Sipchem that sets out the process by which the two companies intend to progress the discussions and negotiations in relation to the merger as per the deal.
While the term of the framework agreement expires on Jan. 31, 2014, the expected timetable for assessing the feasibility of the merger currently remains approximately five months from the date of the first announcement.
Pursuant to the framework agreement, each company has agreed, among other things, to establish its own steering committee to oversee the evaluation of the merger. Such a committee comprises members of the board of directors and senior management of the relevant company who are not conflicted or related parties as per the capital market law and its implementing regulations.
The framework agreement also provides that the two companies will work together to identify any parties, which may have a conflict of interest or are related parties for the purposes of the merger and, as a result, be restricted or prohibited from exercising some or all of their respective voting or other rights in relation to the merger in accordance with applicable laws and regulations.
The entry into the framework agreement does not mean that the merger will be agreed between the two companies. If the merger is agreed, it is currently expected that it will be subject to various conditions including, without limitation, approval at the general assembly of each company and approval of the Saudi regulatory authorities. Further announcements are to be made in due course.