Plastic packaging company Takween Advanced Industries has signed a memorandum of understanding (MoU) with Saudi’s Savola Group to acquire its plastics and packaging business for an undisclosed amount.
As part of the deal, Takween will acquire the entire share capital of Savola's wholly-owned subsidiary Savola Packaging.
Earlier in July, Savola posted a rise in its second-quarter net profit by 32.4% to SAR513.3m ($136.9m), reports Reuters.
As per the 2013 annual report of Savola, in 2013, the consolidated net profit of the packaging unit declined to SAR69.5m ($18.5m) from SAR100m ($26.6m), a year earlier.
Takween Advanced Industries managing director Abdulmohsen Al-Othman said the transaction is affirming the company's strategy of growth in the plastic packaging sector in local as well as overseas markets.
Takween has selected HSBC Saudi Arabia as its financial advisor to deal with the proposed acquisition, which is subject to various conditions and approvals.
The MoU is said to have an initial 16 weeks term.
Takween, along with its two wholly-owned subsidiaries, advanced fabrics factory company SAAF and Ultrapak, produces and sells plastic packaging products and nonwoven fabrics to different customers globally.
Most of the plastic packaging products are distributed to various industrial sectors such as dairy, food and beverage industries.
Takween acquired SAAF and ultrapak manufacturing products company Ultrapak in the year 2010.