Yanbu Cement, Southern Cement sign MoU for potential merger

Logos of Yanbu Cement Co. and Southern Province Cement Co.

Yanbu Cement Co. and Southern Province Cement Co.  signed today, June 23, a non-binding memorandum of understanding (MoU) to evaluate the feasibility of merging the two companies.

In two separate statements to Tadawul, the companies said that they will initiate the verification process and examine the practical, technical, financial, legal, and actuarial aspects.

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Moreover, they will enter into non-binding discussions regarding the details of the terms and conditions of the proposed merger.

The MoU expires either when both companies sign the merger agreement or the elapse of 12 months from signing the MoU, whichever occurs first.

It can also be extended with the parties' consent, and either company can terminate the MoU by providing a written notice to the other party.

The proposed merger is subject to the completion of verification and examination processes in accordance with the requirements of all relevant parties, the agreement on the final terms and conditions of the merger agreement, the regulatory approvals of the competent authorities, and the approval of both companies' shareholders.

Signing the MoU does not imply that the two companies will agree to the proposed merger, the statements stressed.

Both parties intend to continue with their regular business.

According to data available with Argaam, the Public Investment Fund is a major owner in the two companies, as it owns 10% of Yanbu Cement and 37.43% of Southern Cement.

The Saudi cement sector recently witnessed the acquisition of Hail Cement Co. by Qassim Cement Co.

In November 2022, City Cement Co. signed a non-binding MoU with Umm Al-Qura Cement Co. to begin discussions regarding a securities swap deal, under which City Cement would acquire all issued shares in Umm Al-Qura Cement.