Saudi International Petrochemical Co. (Sipchem) said on March 13 it was planning to resume proposed merger talks with Sahara Petrochemical in a deal that could create a 14.7 billion riyals (US$3.9 billion) chemicals company.

The two companies called off a planned merger in 2014, citing an inadequate regulatory framework in the kingdom for the collapse.

Sipchem said on March 13 it was planning to resume discussions with Sahara about the proposed merger after recent changes in the regulatory framework, without elaborating.

It said that further announcements will be made on relevant developments at the appropriate time.

The proposed tie-up, which would create a firm with a market capitalization of 14.7 billion riyals at current values, comes as consolidation gains momentum in the Saudi corporate sector.

In other merger activity, Saudi British Bank and Alawwal Bank are in talks for a proposed merger in a tie-up that would create the third-largest bank in Saudi Arabia.

Both Sipchem and Sahara Petrochemical have the Zamil Group, one of the kingdom’s most prominent family businesses, as a significant shareholder, along with the Saudi Arabian government.