Kazan, September 24, 2021. SIBUR and TAIF have concluded an agreement on the final conditions for the creation of a merged company, whereby the largest petrochemical company in Russia and one of the largest in the world is being created on the basis of SIBUR Holding PJSC.
As part of the closing a deal, TAIF shareholders receive a 15% stake in the merged company in exchange for 50%+1 share of TAIF JSC. In addition, in order to accelerate the integration and improve the efficiency of the operating and investment activities of the merged company, the parties agreed on the early exercise of an option for the remaining stake in the company at the disposal of TAIF shareholders. SIBUR's obligations for monetary reimbursment in the second part of the deal will be secured by the issue of several series of exchange-traded bonds. Thus, within a few days, which will be required to complete the procedures related to the closing of the deal, 100% of the shares of the TAIF group, consisting of petrochemical and energy enterprises, will be consolidated within the frames of the merged company.
The creation of the merged company will strengthen Russia's position in the markets of the chemical, petrochemical and oil and gas industries, increase the competitiveness of domestic products on world markets through economies of scale and increased production efficiency, improving sales processes and improving the quality of customer service to a level comparable to the best international practices.
After the completion of all investment projects that are underway, the merged company will enter the TOP-5 global leaders of polyolefins and rubbers producers. The implementation of the investment program of the merged company will ensure further growth of chemical non-resource exports and import substitution, will provide new opportunities for adressing issues related to sustainable development and ecology.
The accumulated expertise in the implementation of large-scale investment projects and the effective distribution of feed streams within the merged company will open up new prospects for the further development of the petrochemical cluster in Tatarstan and the development of partnership programs with the region.
As part of the merger process, President of the Republic of Tatarstan Rustam Minnikhanov and Chairman of the Board of Directors of SIBUR Holding PJSC Leonid Mikhelson signed a cooperation agreement between the Government of Tatarstan and the company. The parties agreed to join efforts aimed at the development and strengthening of the economic stability of Tatarstan, the formation of a favorable investment environment in the region.
The priority areas of joint cooperation of the company and the Government of the Republic are the following:
- cooperation in the field of sustainable development, including the implementation of projects aimed at greenhouse gas reduction and improving the system of collection and processing of polymer waste;
- cooperation on core businesses of the social investment program "Formula of Good Deeds" of SIBUR Holding PJSC;
- creation of favorable conditions for improving the standard of living of the population by providing charitable and sponsorship assistance to the social sphere;
- promotion of investment, scientific, technical and innovative activities in the territory of Tatarstan;
- elaboration and implementation of joint projects to the extent of public-private partnership;
- implementation of projects aimed at developing partnership and mutually beneficial cooperation with small and medium-sized enterprises;
- training of modern professionals in the field of oil and gas chemistry and energy.
Dmitry Konov, Chairman of the Management Board of SIBUR Holding PJSC:
The association of the leaders of our industry shapes fundamentally different opportunities for qualitative buidup for the Russian petrochemical industry. First of all, we are talking about combining competencies, energy, and ambitions. This is a good basis for growing into one of the global leaders."
Albert Shigabutdinov, Chairman of the Board of Directors of TAIF JSC:
One of the key conditions of the deal is the implementation of the TAIF Group Strategic Development Program worth USD 20 billion. Together with the development program that SIBUR is already implementing in Western Siberia and the Far East, the merged company will be able to achieve its declared goals. There is a great deal of work ahead. On the basis of the best practices of TAIF and SIBUR, we will create a new corporate culture aimed at achieving the best results.
Ruslan Shigabutdinov, Director General of TAIF JSC:
Today, TAIF Group is entering a new stage of its development. The merger of the petrochemical businesses with SIBUR will enable the new company to take a leading position in the global market and enter the TOP 5 world leaders in the production of petrochemical products. We will need to make joint efforts, use the positive experience and best practices of both sides to achieve leadership in the global marketplace. I am sure that together the professional teams of TAIF Group and SIBUR will be able to achieve their goals.
SIBUR is the largest integrated petrochemical company in Russia and one of the most dynamically developing companies in the global petrochemical industry with more than 17,000 employees. SIBUR's unique vertically integrated business model allows to create highly competitive products that are used in consumer goods and automobile manufacturing, construction, energy, as well as chemical and other industries in 100 countries around the world.
SIBUR processes by-products of oil and gas production and thereby contributes to the reduction of CO2 emissions from their combustion.
SIBUR's revenue for the last 12 months amounted to USD 8.8 billion. EBITDA – USD 3.7 billion (as of June 30, 2021). Over the past 10 years, SIBUR has implemented a number of large-scale investment projects worth over USD 21 billion.
TAIF JSC is the parent company of the largest non-public Group of the Russian Federation. TAIF JSC was established in August 1995.
The Group operates in many areas, the key ones are: oil and gas refining, chemicals and petrochemicals, energy, and investment activities. TAIF Group's chemical and petrochemical enterprises produce 581 products, about 40% of which are exported.
TAIF Group is one of the largest producers of plastics and the largest producer of all types of rubbers in the Russian Federation, and the largest producer of isoprene rubber in the world.
The contribution to the development of the country, including tax payments, social expenditures, environmental protection, labor and industrial safety, as well as investments in the development of the Group itself amounted to RUB 2.5 trillion between 1995 and 2021, of which over RUB 285 billion was on a charitable basis.
According to the Development Strategy, which is currently being implemented, TAIF Group plans to produce over RUB 1.7 trillion worth of marketable products a year and make over RUB 215 billion of tax payments a year to the budgets of all levels.
The implementation of the Development Strategy, which includes more than 30 large-scale investment projects, will require a huge amount of investments, the amount of which will be more than RUB 1.8 trillion over the next 15 years .
The Group's net revenue for the last 12 months amounted to more than RUB 720 billion. (as of June 30, 2021).
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