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

By Pramod Kumar
Borouge attributed the slide in profit in 2023 to a 16% decline in average selling prices Wam
Borouge attributed the slide in profit in 2023 to a 16% decline in average selling prices

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.

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.

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