Page 15 - FSUOGM Week 39 2021

FSUOGM INVESTMENT FSUOGM

Russian petrochemical giant

Sibur merges with rival TAIF

RUSSIA RUSSIA’S biggest petrochemicals company ·promoting investment, R&D and innova-
Sibur is close to closing a deal to take over 100% tions in Tatarstan;
The terms of the deal of its Tatarstan based rival TAIF in an equity ·design and implementation of joint PPP
changed slightly from swap that will leave the shareholders of TAIF projects;
the proposal released with 15% of the merged company and bonds, the ·implementation of projects to foster com-
in April. companies announced on September 24. munication and co-operation with SMEs;
The combined business will be one of the five ·training of skilled labour in petrochemicals
biggest producers of polyolefin and rubber prod- and energy.
ucts in the world, the companies said. Russian energy companies have increasingly
“Under the agreement, TAIF shareholders been shifting their focus to the petrochemical
will receive a 15% stake in the new combined sector, lured by the high margins of its leader
company in exchange for 50% plus 1 share in JSC Sibur.
TAIF. To ensure faster integration and higher The terms of the deal changed slightly from
efficiency of the combined entity’s operations the proposal released in April. After com-
and investment programme, the parties have pletion Sibur will own 100% of TAIF and the
agreed on an early exercise of an option for the TAIF shareholders will receive 15% in Sibur in
remaining stake of TAIF’s shareholders. SIBUR’s exchange. Previously a 50% stake in TAIF was
financial obligations in the second phase of the going to be transferred and the remaining shares
transaction will be secured by several issues of bought at a later date, but under the new agree-
exchange-traded bonds. As a result, in a matter ment all TAIF’s shares will be transferred and
of days required to finalise the deal the com- the TAIF shareholders will also receive a series
bined entity will consolidate 100% of the shares of exchange-traded bonds issued by Sibur to the
of TAIF Group, which includes petrochemical TAIF shareholders.
and energy companies,” the companies said in “We agreed on this as it will reduce the
a statement. pressure on Sibur’s cash,” says Komyshan. “In
The deal will increase the size of Sibur and addition, it makes things easier, as all the TAIF
improve its reach on the international mar- daughter companies, some of which are listed,
kets, Sibur’s executive director for marketing will not be affected. Sibur can simply take over
and sales, procurement, innovation and busi- the ownership of the packets of shares TAIF
ness development, Sergey Komyshan, told bne holds in all the daughters. At some later point all
IntelliNews in an exclusive interview a day the boards of directors can be replaced as part of
earlier. a smooth ownership change.”
“The new company will support Russia’s lead- TAIF is a privately held holding company
ership in the chemical, petrochemical and oil & based in the Russian region of Tatarstan, which
gas sectors while making the country’s products in addition to other assets holds controlling
more globally competitive thanks to economies stakes in PAO Nizhnekamskneftekhim (NKNK;
of scale, higher production efficiency, better sales petrochemicals), KOS (petrochemicals) and AO
processes and improved customer service in line TGK-16 (power generation) but does not fully
with global best practices,” the company said. own NKNK and KOS.
As part of the transaction, Rustam Min- Leonid Mikhelson, head of and major share-
nikhanov, President of Tatarstan, and Leonid holder in Russia’s largest gas producer Novatek,
Mikhelson, chairman of the board of directors at owns 48.5% of Sibur. Gennady Timchenko, Mik-
Sibur Holding, signed a co-operation agreement helson’s business partner who is a close ally of
between the Tatarstan government and the com- Russian President Vladimir Putin, owns another
pany. The parties have agreed to work together to 17%, while China’s Sinopec and Silk Road Fund
boost Tatarstan’s economic strength and create a have 10% each. Some former and current man-
favourable climate in the region. agers own 14.5% of the company.
Some of the priorities outlined in the agree-
ment include co-operation in: TAIF
·sustainable development, including imple- Sibur is a giant in Russia’s petrochemical’s busi-
mentation of projects to cut emissions and ness but TAIF is the second-biggest player. It
improve the collection and recycling of polymer controls 68% of Russia’s synthetic rubber pro-
waste; duction, specialising in tyres, and 23% of plastics.
·key areas of SIBUR Holding's Formula for The TAIF group of companies was established in
Good Deeds social investment programme; 1995 and controls 96% of the chemical, petro-
·improving quality of life through charitable chemical and oil and gas processing industries
and sponsorship assistance in the social sphere; in Tatarstan. The company also owns an oil

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