Moscow — Russia’s Sibur and TAIF will combine their petrochemical businesses to create one of world’s top five producers of polyolefin and rubber products, they said on Friday.
Russian energy companies, led by privately owned Sibur, have increasingly been shifting their focus to petrochemicals in a drive to capitalise on the fast-growing sector and offset the volatile market for crude oil exports.
“This combination will make the new company’s petrochemical operations more competitive in the global market, improve its resilience to market fluctuations, and also unlock further growth potential of Russia’s petrochemical industry,” the companies said in a statement.
TAIF said the deal would help TAIF Group accelerate key projects in its 2030 strategic development programme that will see more than 1.5 trillion roubles ($20 billion) of investments over the next 10 years.
Sibur, the largest petrochemicals producer in eastern Europe, said existing TAIF shareholders would receive a 15% stake in PJSC Sibur Holding in exchange for transferring a controlling interest in TAIF’s group of petrochemical and energy firms.
The remaining stake in TAIF can be subsequently purchased by the combined company.
The deal will close subject to completing relevant corporate procedures and receiving necessary regulatory approvals. RIA news agency, citing the head of Sibur, said the deal could be closed by the end of the year.
Leonid Mikhelson, head of and major shareholder in Russia’s largest gas producer Novatek, owns 48.5% of Sibur.
Gennady Timchenko, Mikhelson’s business partner who is a close ally of Russian President Vladimir Putin, owns another 17%, while China’s Sinopec and Silk Road Fund have 10% each. Some former and current managers own 14.5% of the company.
TAIF, located in the Russian Republic of Tatarstan, accounts for 64% and 28% of Russia’s total output of rubbers and plastics respectively.
$1 = 74.8900 roubles
(Reporting by Vladimir Soldatkin; Editing by Edmund Blair)
This article was oroginally posted at sweetcrudereports.com