Moscow – Sibur and Russian energy group TAIF have finalised a previously announced merger of their petrochemical assets to create the world’s fifth manufacturer of rubber and polyolefin products.
As part of the deal, for a ‘50%+1’ share in TAIF-Sibur, existing TAIF shareholders will receive a 15% share in Sibur while current Sibur shareholders decrease their share accordingly.
For the rest 50%-1 share parties initiate option process, and Sibur will place bonds to finance the deal.
In a 24 Sept statement, Sibur said the new combined company will support “Russia’s leadership in the chemical, petrochemical and oil & gas sectors while making the country’s products more globally competitive.”
The deal, it said, will bring economies of scale, higher production efficiency and better sales processes while offering opportunities for optimisation of feedstock flows to make higher value-added products locally.
According to Sibur, the two companies offer “highly complementary product portfolios and expertise.”
TAIF will particularly contribute elastomers, polystyrene and polycarbonates, while Sibur will leverage its base polymers, TPE and PET.
Following the completion of all ongoing investment projects, Sibur expects the new combined company to be among the top five producers of polyolefin and rubber globally.
As part of the transaction, Rustam Minnikhanov, president of Tatarstan, and Leonid Mikhelson, chairman of the board of directors at Sibur, signed a cooperation agreement between the Tatarstan government and the company.
The parties agreed to work together to boost Tatarstan’s economic strength and create “a favourable investment climate in the region.”
Sibur said the deal did not involve the creation of a new entity but did not ruled out that it could potentially create a separate elastomers business.
“We may consider that. It is not clear yet,” said Dmitry Konov, chairman of the management board at Sibur holding in a separate statement to ERJ.
According to konov, TAIF’s elastomers business is part of the group’s polyolefins and intermediates division, while Sibur has rubbers alongside plastics and intermediates.
“It is something we have to discuss internally in the coming months,” he added.
TAIF chemical and petrochemical product portfolio comprises 581 commodities, including synthetic rubbers and various grades and types of polyethylene, polypropylene, polycarbonate, and styrene plastics.
The group's assets include major rubber and materials producer Nizhnekamskneftekhim, with the capacity to produce 800 kilotonnes per annum (ktpa) of elastomers, and polyethylene manufacturer Kazanorgsintez.
TAIF’s share in Russia’s 2020 total output of rubbers and plastics was 64% and 28%, respectively.