Is the Gulf Quietly Rewriting Its Chemical Rulebook?

Talks over a $1.6B merger reveal how Gulf regulators may be shaping the next phase of the chemical industry

6 Nov 2025

Indian chemical group Dorf Ketal’s advanced talks to acquire Italy’s Italmatch Chemicals for about $1.6bn have drawn attention from regulators and industry analysts tracking the Gulf’s emerging sustainability framework. The proposed merger, while not yet confirmed, offers an early test of how evolving regional compliance expectations are influencing corporate strategy.

The deal would merge Dorf Ketal’s refinery and oilfield additives with Italmatch’s speciality chemicals, potentially aligning the combined group with stricter global environmental and disclosure standards. Though Gulf governments have not introduced sweeping regulatory reforms, companies operating in the region are beginning to adapt to the growing weight of sustainability-linked policies.

“This proposed deal reflects growing awareness among suppliers that the Gulf market increasingly rewards sustainability readiness,” said energy policy consultant Sara Haddad. “It’s more about positioning for potential future frameworks than responding to existing regulation.”

National oil companies such as Saudi Aramco and ADNOC have stepped up localisation and environmental compliance efforts, seeking partners capable of meeting higher transparency and emissions reporting thresholds. Analysts say such expectations are gradually shaping supply chains, even in the absence of formal mandates.

If completed, the acquisition will need to navigate diverse regulatory jurisdictions across Asia, Europe and the Middle East, underscoring the complexity of harmonising chemical safety and sustainability standards. The negotiations also signal how regulators in the Gulf are being quietly drawn into global efforts to align industrial growth with environmental accountability.

While no direct policy shifts have yet been linked to the deal, it illustrates the direction of travel: regulatory credibility is becoming a strategic asset. As Gulf economies deepen their industrial diversification, companies able to demonstrate compliance with emerging sustainability and disclosure frameworks are likely to gain a competitive edge.