Saudi Arabian Fertilizer Company (SAFCO) [2020.SE] has hired a financial advisor, as of 10 October 2016 to conduct a feasibility study about acquiring Saudi Basic Industries Corporation’s (SABIC) [2010.SE] full stake in National Chemical Fertilizers Company (Ibn Al-Baytar). SABIC has also hired a financial advisor from its side to conduct a feasibility study on the full exit of its stake in Ibn Al-Baytar. Both companies mentioned that they would be proceeding with the transaction if feasibility studies lead to positive results, and that the studies would be completed by 1Q17. It was also mentioned that the hiring of the financial advisors would not have an impact on their financial results. As we have mentioned previously, we do not think the deal will have a meaningful impact on SABIC, given the size of its operations, but it could mean further downside risks to dividends from SAFCO, depending on the agreed-upon price for the transaction and how SAFCO’s management decides to finance it. (Tadawul, Yousef El Husseini)    SAFCO: SAR64.38 as of 09 October 2016, Rating: Sell, FV: SAR57.50 per share, MCap: USD7,153mn, SAFCO AB / 2020.SE SABIC: SAR82.81 as of 09 October 2016, Rating: Neutral, FV: SAR90.00 per share, MCap: USD66,248mn, SABIC AB / 2010.SE