Adnoc and OMV in talks to create $30bn chemicals giant

Wam

State-owned Abu Dhabi National Oil Company (Adnoc) and Austria’s OMV AG are 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.

Vienna-based Borealis is 75 percent owned by OMV, while Adnoc holds the remaining stake. Abu Dhabi-listed Borouge is a partnership between Adnoc and Borealis with a market value of $22 billion.

The owners are in talks for the potential valuation and ownership structure of a new entity, Bloomberg reported, citing informed sources.

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The broad outlines for merger negotiations are likely to be reached in the coming weeks.

The sources said the two entities are in talks to propose a valuation of $10 billion for Borealis, including its Borouge stake.

Moreover, Adnoc and OMV are discussing the possibility of equal shareholding and decision-making capabilities.

The Austrian company wants the new entity’s headquarters to be in Europe, even if it is listed in Abu Dhabi.

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

The Abu Dhabi oil major 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.