MOSCOW (MRC) -- The Federal Antimonopoly Service (FAS) has satisfied the petition of SIBUR, the largest petrochemical holding in Russia and Eastern Europe, to acquire 100% of the voting shares of TAIF holding, reported Vedomosti, citing the regulator's media service.
The company's business merger was announced earlier, on 23 April. The FAS believes that such a decision will "strengthen Russia's position as a non-resource exporter with full satisfaction of the interests of the domestic market," according to the ministry's message.
At the same time, the regulator issued an order to SIBUR on the fulfillment of a number of mandatory conditions for the transaction. Thus, the holding will have to meet the needs of the domestic market with its products. For example, the company will be able to process liquefied petroleum gas only partially, since in unprocessed form this type of raw material is used as fuel, partially for the needs of housing and communal services.
By the end of this year, SIBUR will have to submit to the FAS its draft trade policy for consideration, which will present a scheme for the sale of all goods produced by the company with a share of more than 50% in the Russian commodity market. In the same document, provisions will be enshrined that guarantee the protection of the rights of potential counterparties of the holding, which cannot be infringed upon, also through the creation of discriminatory or imposition of unfavourable conditions.
It is clarified that SIBUR will not be able to refuse to conclude supply contracts in Russia without economic or technological reasons. In addition, the company will be obliged to sell products under direct long-term contracts, given the possibility of efficient delivery of goods to the consumer, the FAS noted.
As MRC reported earlier, in April 2021, SIBUR Holding and TAIF announced the start of the merger of the oil and gas chemical businesses of the companies. As part of the merger, a company will be created on the basis of SIBUR Holding PJSC, in which the existing shareholders of TAIF will receive a 15% stake in exchange for the transfer of a controlling stake in a group consisting of petrochemical and energy enterprises. The remaining stake in TAIF can be subsequently purchased by the merged company.
The combined group's overall capacities of eight base polymers will be at 5.7 million tonnes, or 70.7% of those operating in Russia. Today, SIBUR's capacity for base polymers is almost twice that of TAIF. SIBUR's eight production sites have a capacity of 3.9 million tons and TAIF has two plants (Kazanorgsintez and Nizhnekamskneftekhim) with a total capacity of 2.2 million tons.
As a result of the merger, the total capacity share of the new SIBUR-TAIF group will be 100% for the production of linear low density polyethylene (LLDPE), 87.4% - for polypropylene (PP), 80.8% - for high density polyethylene (HDPE) and 59.3% - for low density polyethylene (LDPE).
According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 953,400 tonnes in the first five months of 2021, which virtually corresponded to the same figure a year earlier. High denisty polyethylene (HDPE) shipments decreased. At the same time, PP shipments to the Russian market were 607,8900 tonnes in January-May 2021, up by 33% year on year. Shipments of homopolymer PP and PP block copolymers increased, whereas deliveries of PP random copolymers decreased.
SIBUR manufactures and sells petrochemical products in the Russian and international markets in two business segments: olefins and polyolefins (polypropylene, polyethylene, BOPP, etc.), as well as plastics, elastomers and intermediate products (synthetic rubbers, expanded polystyrene, PET, etc.).
PSC "TAIF" was established in 1995 and is the parent company of the group with the same name, which includes enterprises structured in four business areas: oil and gas processing, chemistry and petrochemistry (energy); investment and financial services; building; telecommunications and complex services, including trade. TAIF Group of Companies is a large Russian holding that controls 96% of the chemical, petrochemical and oil and gas processing industries in Tatarstan. The most important of its areas is the Chemical, Petrochemical and Oil and Gas Processing Divisions, which include the leading Russian polymer producers Nizhnekamskneftekhim and Kazanorgsintez.