‘Combined entity would be a larger market capital and a more diversified portfolio’ says company’s Group CEO
KIPCO – Kuwait Projects Company (Holding) – has announced reaching a preliminary agreement to merge by amalgamation with Qurain Petrochemical Industries Company (QPIC). The two companies signed a Memorandum of Understanding (MoU) whereby they agreed to assess the merger proposition.
As per the MoU agreement, KIPCO shall be the merging entity and QPIC shall be the merged entity.
The merger is subject to a detailed process as per Kuwaiti laws and regulations. This includes due diligence, valuation of both entities and fairness opinion by licensed independent advisors, in addition to regulatory approvals and the approval of stakeholders including the Extraordinary General Assembly of both parties.
The merger proposition combines the two companies to form a larger investment holding that would rank among the largest in the MENA region.
Furthermore, the combined entity would benefit from a balanced and diversified portfolio of assets that includes petrochemical and oil services, banking, foodstuff, insurance and others. This creates a more stable income stream.
Sheikha Dana Nasser Sabah Al Ahmad Al Sabah, KIPCO’s Group Chief Executive Officer, said:
“Looking ahead, we see an opportunity to create a stronger investment holding company that would capitalize on operational synergies between KIPCO and QPIC. The combined entity would have the ability to pursue opportunities in new sectors and continue to support the growth of its existing portfolio, thereby creating greater value for all of the shareholders.”
Mr Sadoun Ali, QPIC’s Vice Chairman and Chief Executive Officer, said:
“At QPIC, we always look for opportunities to create better value for our shareholders. This has proven true through our policy of revenue diversification, which has reflected positively on our growth in past years. This may also be the case in this potential opportunity, once the independent investment advisor’s report is completed, as per the requirements of the Capital Markets Authority and related authorities in Kuwait.”