Austria’s OMV and Abu Dhabi National Oil Company ADNOC have agreed to combine their polyolefins businesses to create a US$60 billion global polyolefins powerhouse. The agreement entails the combination of Borealis and Borouge under a new, jointly controlled joint venture company.
The new company will be a joint platform for OMV and ADNOC for potential growth acquisitions in the polyolefins sector and will be named Borouge Group International, OMV and ADNOC announced on their websites.
OMV and ADNOC have also agreed that the joint venture company Borouge Group International will purchase all shares in Nova Chemicals for US$ 9.377 billion from Nova Chemicals Holdings, a wholly owned subsidiary of Mubadala Investment Company.
The acquisition, together with the recontribution of Borouge-4, would create a new $60+ billion global polyolefins champion, set to be the world’s fourth largest by nameplate production capacity.
OMV and ADNOC will have equal shareholdings and joint control in the joint venture company. OMV will make a capital injection of 1.608 billion Euros into the joint venture company, which will be listed on the Abu Dhabi Securities Exchange with the intent for a later listing on the Vienna Stock Exchange. The joint venture company will be headquartered in Austria.
The right to appoint the chairperson of the supervisory board of the joint venture company will remain with ADNOC. The acquisition of Nova Chemicals by the joint venture company will be financed by a bridge-financing, which will be refinanced including by way of a capital increase with a currently expected volume up to an amount of US$ 4 billion where OMV and ADNOC are not expected to participate.
Dr. Sultan Ahmed Al Jaber, ADNOC managing director and Group CEO, said, “These transformative transactions mark a pivotal milestone in ADNOC’s global chemicals strategy as we deliver on our international growth mandate. Building on our 25-year strategic partnership with OMV, we will create a new industry powerhouse, with a portfolio of premium products, cutting-edge technologies and worldwide market access. The visionary combination of Borouge and Borealis and acquisition of Nova Chemicals, further future-proofs ADNOC and solidifies Abu Dhabi’s status as a leader in the chemicals sector, as we seek to meet the growing global demand for chemicals and associated products, while driving value creation and growth opportunities for our shareholders.”
Alfred Stern, chairman of the executive board and chief executive officer of OMV, said, “These landmark transactions represent a momentous step for OMV. They will accelerate our growth strategy in Chemicals and support OMV’s transformation into an integrated sustainable chemicals, fuels, and energy company. Together with ADNOC, our strategic partner of 25 years, we are creating a global polyolefins leader, exceptionally positioned for value creation by accessing the largest and most cost advantaged markets. We aim to significantly increase the sales volumes of inNovative polyolefin premium products and be at the forefront of renewable and circular economy solutions. Together, OMV and ADNOC will build on a versatile and future-proof product portfolio and pursue significant organic growth opportunities. Most importantly, today’s agreement secures material synergies and long-term sustainable value creation for OMV’s shareholders. ADNOC and OMV have already proven that we are stronger together. We are convinced that we will unlock superior shareholder value on our joint path forward.”
