SIBUR and TAIF finalise terms of merger

Kazan, 24 September 2021. SIBUR and TAIF have entered into an agreement finalising the creation of a combined entity that will leverage the facilities of PJSC SIBUR Holding and create the largest petrochemical company in Russia and one of the biggest in the world.

Under the agreement, TAIF shareholders will receive a 15% stake in the new combined company in exchange for 50% plus 1 share in JSC TAIF. To ensure faster integration and higher efficiency of the combined entity’s operations and investment programme, the parties have agreed on an early exercise of an option for the remaining stake of TAIF’s shareholders. SIBUR’s financial obligations in the second phase of the transaction will be secured by several issues of exchange-traded bonds. As a result, in a matter of days required to finalise the deal the combined entity will consolidate 100% of the shares of TAIF Group, which includes petrochemical and energy companies.

The new company will support Russia’s leadership in the chemical, petrochemical and oil & gas sectors while making the country’s products more globally competitive thanks to economies of scale, higher production efficiency, better sales processes and improved customer service in line with global best practices.

Following the completion of all ongoing investment projects, the new combined company will be among the top 5 producers of polyolefin and rubber globally. The company’s investment programme will yield further growth of chemical non-commodity exports and import substitution, and also unlock new ways of tackling sustainability and environmental challenges.

The deal brings together the two companies’ vast expertise in major investment projects and facilitates efficient distribution of feedstock, which will boost Tatarstan's petrochemical cluster and pave the way for new partnerships with the region.

As part of the transaction, Rustam Minnikhanov, President of Tatarstan, and Leonid Mikhelson, Chairman of the Board of Directors at PJSC SIBUR Holding, 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.

Some of the priorities outlined in the agreement include cooperation in:

·       sustainable development, including implementation of projects to cut emissions and improve the collection and recycling of polymer waste;

·       key areas of SIBUR Holding's Formula for Good Deeds social investment programme;

·       improving quality of life through charitable and sponsorship assistance in the social sphere;

·       promoting investment, R&D and innovations in Tatarstan;

·       design and implementation of joint PPP projects;

·       implementation of projects to foster communication and cooperation with SMEs;

·       training of skilled labour in petrochemicals and energy.

Dmitry Konov, Chairman of the Management Board at SIBUR Holding:

“This combination of industry leaders represents a significant step in the evolution of the Russian petrochemical sector. We are combining our competencies, energy and ambition to lay the groundwork for what is sure to become a global leader.”

Albert Shigabutdinov, Chairman of JSC TAIF's Board of Directors:

“One of the key elements of the deal is TAIF Group's USD 20 bn Strategic Development Programme. Combine that with the development programme that SIBUR is already running in Western Siberia and the Far East, and it is safe to say that the new company will hit its targets. We definitely have to work hard, but our goal is to create a completely new and strictly performance-oriented corporate culture drawing on TAIF's and SIBUR’s best practices.”

Ruslan Shigabutdinov, General Director of JSC TAIF:

“Today TAIF Group is entering a new stage of its development. The combination of our petrochemical businesses with SIBUR will enable the new company to assert its leadership in the global market and become a top-5 global petrochemical producers. To achieve global leadership, we will have to work together, share positive experience and draw on the best practices of the two companies. I am convinced that joining forces of TAIF Group's and SIBUR’s professional teams will help us achieve the goals we have set for ourselves.”