The companies' boards have approved initial discussions to study the feasibility of a merger but no agreement has been reached on any final structure of a merged entity, the companies said in separate statements.
SIIG owns 50% of Petrochem but the two companies are similar in size, suggesting a deal would be a merger of near equals.
The two companies had combined assets of US$9.5 billion as of June, Refinitiv data shows. SIIG had total assets of 19.2 billion riyals (US$5.12 billion) at the end of June while Petrochem had 16.4 billion riyals in total assets.
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