KUWAIT CITY, Dec 24, (KUNA): The Petrochemical Industries Company (PIC) and the Dow Chemical Company (Dow) have agreed that EQUATE will get acquisition of 100 percent MEGlobal shares for USD 3.2 billion, the PIC said in an exclusive press release to KUNA. PIC will continue to retain its 42.5 percent in EQUATE and thereby MEGlobal (indirectly through EQUATE). The cash proceeds received by PIC in the transaction will assist in financing PIC’s strong pipeline of expansion projects, the release added.
The acquisition of MEGlobal, one of the most productive companies globally in terms of revenue per employee, will be highly accretive to EQUATE and will provide EQUATE with enhanced geographic reach, including in the US Gulf Coast, with confirmed access to low-cost feedstock, it said. “We are continually looking for opportunities to thrive in attractive regions with abundant feedstock, competitive costs and a favorable environment for the petrochemical industry, and the transactions announced today represent PIC capitalizing on one such opportunity, consistent with PIC’s strategy of aspiring to be a global player in the petrochemical industry,” CEO of the PIC Asaad ALsaad, told KUNA.
He added that MEGlobal will build a monoethylene glycol plant on the US Gulf Coast – positioning MEGlobal and its parent companies “to enjoy growth in a highly strategic region of the world through a significant expansion of MEGlobal’s geographic footprint and capacity”. The transaction has transformed EQUATE into a global leader in the petrochemical sector, the company added in a press statement. “This is an extraordinary day in the proud history of EQUATE and MEGlobal.
The addition of MEGlobal positions EQUATE as an industry-leading petrochemical enterprise with an enhanced leadership position in the ethylene glycol (EG) sector in which MEGlobal maintains a 12 percent market share today,” said EQUATE President and CEO Mohammad Husain. “Together we are building a new enterprise that will serve as a foundation for sustainable growth in the petrochemical sector in Kuwait and the industry globally,” Husain added.
He noted that since its inception in 1995, “EQUATE has been a pioneer in the petrochemical sector.” “We had consistent growth over the last 20 years and contributed greatly to the local economy and community. As we continue creating value for our shareholders by growing our businesses and further support, invest and create opportunities that will help make a positive difference. This is part of our core corporate values,” Husain concluded. Currently, EQUATE contributes close to 60 percent revenue of Kuwait’s non-oil exports, in line with the country’s economic strategy of diversification.
The acquisition will further strengthen this position and create added -value across varied sectors in the country. MEGlobal will provide EQUATE with a major growth opportunity through a new world-scale project in the US. Gulf Coast utilizing advantaged shale gas feedstock. In addition, the transaction will bring with it an experienced leadership and operations team, as well as a global network of clients, the statement said.
The combined entity will benefit from significant economies of scale with a larger and more diversified distribution platform through Kuwait, Germany, Canada and the US. Furthermore, it will result in an optimized cost structure with multiple points of access to feedstock from sources in North America and the Middle East with improved operational efficiency