DUBAI: Saudi Arabian petrochemicals companies Saudi Industrial Investment Group (SIIG) and the National Petrochemical Company (Petrochem) have begun talks over a potential merger, they said on Sunday.

A deal would mark further consolidation in the Saudi petrochemicals sector after oil giant Saudi Aramco bought a 70% stake in Saudi Basic Industries in June. The SIIG and Petrochem 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 $9.5 billion as of June, Refinitiv data shows. SIIG had total assets of 19.2 billion riyals ($5.12 billion) at the end of June while Petrochem had 16.4 billion riyals in total assets.