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Adnoc confirms talks on potential chemicals giant

The possible deal with Adnoc could value German oil and gas producer Wintershall Dea at more than $11bn Reuters/Toru Hanai
The possible deal with Adnoc could value German oil and gas producer Wintershall Dea at more than $11bn

State-owned Abu Dhabi National Oil Company (Adnoc) has confirmed formal negotiations with Austria’s OMV AG (OMV) on the potential creation of a new combined petrochemicals holding entity.

The new entity will be created through the proposed merger of the two companies’ existing shareholdings in Borouge plc and Borealis AG.

Borouge is listed on the Abu Dhabi Securities Exchange (ADX), with 54 percent owned by Adnoc, 36 percent by Borealis, and 10 percent held by retail and institutional investors.

Borealis is owned 75 percent by OMV, with Adnoc holding 25 percent.

Adnoc is undertaking these negotiations as the majority shareholder of Borouge and OMV as the majority shareholder in Borealis.

Any final decision is subject to Borouge’s and other relevant parties, governance processes, the UAE state-run WAM news agency reported citing a statement from Adnoc.

The potential merger is subject to customary regulatory clearances.

Bloomberg earlier this month reported that Adnoc and OMV were in discussion over the possible merger of chemical companies Borouge and Borealis AG to create a chemicals and plastics giant worth more than $30 billion.

The Abu Dhabi oil major made a preliminary $12 billion takeover approach for German polymers producer Covestro AG last month. However, it was rejected for being “too low”.

Adnoc announced plans to invest $150 billion in November 2022 as part of its 2023-2027 business strategy to expand production capacity for crude, natural gas and chemicals.

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