Middle East Paper Company (MEPCO) announced today, Sunday, its decision to terminate the proposed acquisition agreement for all the sellers' shares in Al-Midan Corrugated Carton Company. This strategic decision came as a result of the failure to meet all the preconditions stipulated in the agreement before the previously set termination date of December 27, 2025, thus necessitating the activation of the termination clauses to protect the interests of the company and its shareholders.
Agreement details and timeline
The origins of this transaction can be traced back to Mabco's previous announcement on the Saudi Stock Exchange (Tadawul) website on March 27, 2025, in which the company disclosed that it had entered into a binding share purchase agreement with a group of sellers: Najla Abdullah Al-Otaibi, Najoud Ayed Al-Otaibi, Al-Waleed Ayed Al-Otaibi, Amjad Ayed Al-Otaibi, Abdulmajeed Ayed Al-Otaibi, and Mohammed Ayed Al-Otaibi. The objective of the agreement was the complete acquisition of their shares in Meydan Projects for Corrugated Carton Company (Meydan Company).
The company explained in its previous statement that the agreement included a fundamental condition that gives (Mabco) the right to terminate the deal by giving written notice to the sellers, in the event that the preconditions for completing the acquisition process are not met after a period of 9 months from the date of signing, which was indeed achieved by the deadline.
Mabco's position in the industrial market
The Middle East Paper Company (MEPCO) is one of the largest paper and cardboard manufacturers in the Middle East and North Africa region. The company plays a pivotal role in promoting the circular economy through recycling and sustainable production. Its ongoing acquisitions are typically part of its vertical and horizontal expansion strategy, aimed at increasing its market share and enhancing the efficiency of its supply chains.
The importance of the packaging and corrugated cardboard sector
The corrugated cardboard sector is gaining increasing importance in Saudi Arabia and the region, driven by the rapid growth of e-commerce, food processing, and manufacturing. This sector is a cornerstone of logistics, as the transport and protection of goods rely heavily on innovative packaging solutions. Despite the failure of this particular deal, the investment by major companies like Mabco in this field reflects the market's attractiveness and the opportunities it offers, aligning with the Kingdom's Vision 2030 goals for developing national industry.
Governance and investor protection
The decision to terminate the agreement reflects Mabco's commitment to rigorous governance standards and meticulous financial and legal evaluation of transactions. In the world of finance and business, withdrawing from a deal when preconditions are not met is a necessary step to avoid future operational or financial risks. This action reassures investors in the Saudi stock market of the company's management's commitment to entering only into investments that generate added value and meet all required regulatory and commercial standards.
