ADNOC has confirmed that it has entered into formal talks with Austria’s OMV AG regarding a new combined petrochemicals holding entity through a possible merger of its respective stakes in Borouge plc and Borealis AG, according to press releases from the two companies.
Borouge, a petrochemical company that provides polyolefin solutions, is 54% owned by ADNOC and 36% by Borealis, with the remainder listed on the Abu Dhabi Stock Exchange, including ten percent held by investors retail and institutional. Borealis, a provider of advanced and sustainable polyolefin solutions and a European leader in polyolefin recycling, is 75 percent owned by OMV and 25 percent by ADNOC, according to OMV.
ADNOC said it is conducting the negotiations as the majority shareholder of Borouge with OMV as the majority shareholder of Borealis. The Abu Dhabi company said any final decision will be subject to Borouge’s governance processes and the processes of other relevant parties. The new entity could be valued at $30 billion, according to a previous Bloomberg report.
“The potential merger would mark the next transformative milestone in ADNOC’s chemicals growth and value creation strategy, with any transaction subject to customary regulatory clearances,” ADNOC said in the statement.
OMV said the talks would involve combining the Borealis and Borouge business as “equal partners under a listed and jointly controlled platform for potential growth acquisitions to create a global polyolefins company with a material presence in key markets”.
“This potential transaction would have a strong and compelling industrial logic,” said Alfred Stern, OMV’s chairman and CEO. “The combination of the two complementary businesses would bring together Borealis’ technological expertise and specialist, sustainable polyolefins solutions, with Borouge’s advantageous cost position and access to attractive markets, creating a new global polyolefins powerhouse with a significant organic and inorganic growth potential”.
“This would build on more than 25 years of successful partnership with ADNOC and would be one of the potential catalysts to achieve OMV’s 2030 strategy. At the same time, there are a number of transaction parameters that are subject to a mutual agreement during the negotiation”. Stern added.
According to the company’s website, OMV, through its subsidiary Borealis, is one of the world’s leading suppliers of circular and advanced polyolefin solutions and the European market leader in the recycling of basic chemicals and plastics. OMV’s fuels and raw materials business produces and markets fuels and raw materials for the chemical industry, operates three refineries in Europe and has a 15 percent stake in a refining joint venture in the United Arab Emirates.
OMV also explores and produces oil and gas in the four core regions of Central and Eastern Europe, the Middle East and Africa, the North Sea and Asia-Pacific, with average daily production in 2022 totaling 392,000 barrels of equivalent of oil per day.
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