Page 8 - FSUOGM Week 17 2021

FSUOGM COMMENTARY FSUOGM

Russian petchems firms Sibur,

Taif strike merger deal

The tie-up will create one of the world's top five petrochemical producers

RUSSIA RUSSIAN companies Sibur and TAIF have Sibur, the largest petrochemicals producer
agreed to merge their petrochemicals businesses in Eastern Europe, said that TAIF’s sharehold-
WHAT: in a deal set to establish one of the world’s top five ers would receive a 15% interest in PJSC Sibur
Sibur and Taif have producers, Sibur announced on April 23. Holding in return for a controlling interest in
agreed to merge Sibur and other Russian companies have TAIF’s petrochemical and energy assets. There
their petrochemicals been building up their petrochemical capaci- is an option for the remaining stake in TAIF to
businesses. ties in recent years, taking advantage of Russia’s be bought by the combined company at a later
abundant and low-cost oil and gas feedstock stage.
WHY: supply. But the markets for many petrochemi- Sibur has been investing heavily into expand-
The move will make them cal products have been bearish in recent years, ing its production base and moving up the value
more competitive through owing to rising demand and a slowdown in chain. Last year its ZapSibNeftekhim petro-
synergies and greater demand growth in key markets. chemical complex (ZapSib) came online as pro-
clout. “This combination will make the new com- filed by bne IntelliNews in “Plastics in the snow.”
pany’s petrochemical operations more compet- It also closed a $11bn joint venture deal to build
WHAT NEXT: itive in the global market, improve its resilience Amur Gas Chemical plant with China’s Sinopec.
Sibur has said it will not to market fluctuations, and also unlock further The transaction is subject to standard corpo-
go ahead with its IPO growth potential of Russia’s petrochemical rate procedures and regulatory approvals, but
until the deal is closed. industry,” Sibur and TAIF said in statements. could be closed by the end of the year, Sibur CEO
TAIF, which owns the Nizhnekamskneft- Dmitry Konov said. Sibur expects to consolidate
ekhim oil refining and petrochemicals complex the remaining share in Taif within a few years, he
in Tatarstan among other assets, said the deal said, without disclosing the deal’s value.
would help it move ahead with key projects. “Creating a larger and more diversified com-
The company is looking to invest more than pany, is timely as the global competition is harsh
RUB1.5 trillion ($20bn) in expansion over the and will get harsher,” Konov told the Financial
next decade. Times (FT). “Synergy is a big part of this deal. We

P8 www. NEWSBASE .com Week 17 28•April•2021