Saudi Industrial Investment Group (SASE:2250) entered into a non-binding memorandum of understanding to acquire remaining 50% stake in National Petrochemical Company (SASE:2002) from General Organization for Social Insurance, Hamad Saud Alsayari, Sulaiman Mohammed Almandeel, Abdulrahman Alismail, Rasheed Rashed Alowain and other shareholders for SAR 12.2 billion in a merger of equals transaction on September 27, 2021. On October 27, 2021, Saudi Industrial Investment Group entered into an implementation agreement to acquire remaining 50% stake in National Petrochemical Company. Under the terms of the agreement, Saudi Industrial Investment Group will make an offer to acquire all issued shares in National Petrochemical Company not already owned by it. The exchange ratio is 1.27 which implies that shareholders of National Petrochemical Company will receive 1.27 shares of Saudi Industrial Investment Group for each share they own in National Petrochemical Company and Saudi Industrial Investment will issue 304.8 million shares as consideration. Upon completion of the transaction, Petrochem's shareholders will own 40.38% stake of SIIG and SIIG's existing shareholders will own 59.62% stake. After the transaction, National Petrochemical Company will be delisted from the Saudi Stock Exchange (Tadawul) and will become a wholly owned subsidiary of Saudi Industrial Investment Group. There will be no immediate change in both companies' businesses as a result of the transaction. Both companies will remain independent and separate, and both will continue to operate on a business-as-usual basis. The transaction can be terminated under certain circumstances. However there is no break-up fees applicable to the transaction.

Petrochem does not expect that the transaction, if completed, will result in the involuntary redundancy of employees. Upon completion, the Board shall comprise of two members who shall be nominated by Petrochem's board of directors within no less than thirty business days after the completion date of the transaction to fill the two vacant seats at the board of directors of SIIG-post-completion. General Organization for Social Insurance will have representatives on the board of directors of SIIG. General Organization for Social Insurance currently has two representatives at SIIG's board of directors, two individuals nominated by Petrochem's board of directors will be nominated to be members of the board of directors of SIIG post-completion and the remaining members will be from the then current board of directors of SIIG. The transaction is subject to Saudi Industrial Investment Group and National Petrochemical Company agreeing a final binding agreement that determines the terms and conditions of the transaction, third party approvals, regulatory approvals including approval from Capital Market Authority, obtaining of the required approval of the Saudi Exchange on listing the consideration shares on the Saudi Exchange, no material adverse event and the approval of the extraordinary general assembly of Saudi Industrial Investment Group and National Petrochemical Company. Saudi Industrial Investment Group and National Petrochemical Company aim to complete all the relevant requirements of the transaction before the end of the current Gregorian year, including the execution of the definitive binding agreement, obtaining the regulatory approvals, and then presenting the transaction to the shareholders of both Petrochem and Saudi Industrial Investment Group in accordance with the applicable laws and regulations. The transaction has been approved by Capital Market Authority on March 16, 2022. As of October 27, 2021, the transaction is expected to be completed in the fourth quarter of 2021. As on December 30, 2021, the transaction is expected to take effect during the first quarter of 2022. Both companies are currently working to obtain all necessary approvals in accordance with the applicable laws and regulations as well as the terms and conditions set out in the Implementation Agreement.

GIB Capital LLC acted as the financial advisor and fairness opinion provider and Abuhimed Alsheikh Alhagbani Law Firm acted as the legal advisor to National Petrochemical Company. HSBC Saudi Arabia Limited acted as the financial advisor and fairness opinion provider and Khoshaim & Associates acted as the legal advisor to Saudi Industrial Investment Group. HSBC Saudi Arabia and GIB Capital LLC consider the terms of the transaction to be fair. Ernst & Young Saudi Arabia acted as financial due diligence provider to National Petrochemical Company (SASE:2002).

Saudi Industrial Investment Group (SASE:2250) completed the acquisition of remaining 50% stake in National Petrochemical Company (SASE:2002) from General Organization for Social Insurance, Hamad Saud Alsayari, Sulaiman Mohammed Almandeel, Abdulrahman Alismail, Rasheed Rashed Alowain and other shareholders for SAR 12.2 billion in a merger of equals transaction on April 11, 2022. Saudi Industrial Investment Group (SIIG) has obtained the approval of National Petrochemical Company's shareholders.