Russia’s SIBUR and TAIF agree to merge petrochemical businesses

Russia’s SIBUR and TAIF have agreed to merge their petrochemical businesses with an objective to become a top five producer of polyolefin and rubber products in the world.

As per the terms of the deal, existing TAIF shareholders will get a stake of 15% in SIBUR in return for a controlling stake in TAIF’s group of petrochemical and energy firms.

The remaining stake in TAIF can be acquired subsequently by the combined firm resulting from the merger.

According to SIBUR, the combination will make the petrochemical operations of the new firm more competitive in the international market, boost its resilience to market fluctuations, and also unlock further potential for growth of the Russian petrochemical industry by joint realization of capital intensive projects, and also by improving chemical non-commodity exports.

Russia‘s SIBUR and TAIF agree to merge petrochemical businesses. Photo courtesy of PAO SIBUR Holding – https://www.sibur.ru/

Dmitry Konov – Chairman of the Management Board at SIBUR said: “TAIF Group boasts an unrivalled portfolio of products and technologies. Powered further by SIBUR’s capabilities, the new combined company will be able to deliver an industry leading growth programme.

“By combining our assets and professional teams, we will further boost productivity at Russia’s leading petrochemical facilities and also significantly improve the competitive position of the Russian petrochemical industry on global markets.”

Besides, the merger will enable more efficient distribution of feedstock to ensure full utilization of capacity and pave the way for further developing the petrochemical cluster in Tatarstan.

The new petrochemical company is anticipated to continue with funding for the approved capex program and development of TAIF’s assets.

Albert Shigabutdinov – Chairman of TAIF Board of Directors said: “Through the merger of our companies, we can unleash the huge potential for further efficient development of the nation’s petrochemical industry.

“The deal will help TAIF Group to substantially accelerate the key projects in its 2030 Strategic Development Programme that will see over RUB 1.5 tn of investment over the next ten years, improve productivity at our facilities, and expand our product mix. By 2030, we expect tax payments, including those to Tatarstan’s consolidated budget, to increase significantly – to up to RUB 50 billion per year.”

The merger will be subject to the completion of the required corporate procedures and regulatory approvals.