Borouge proposes share buyback after merger stock slide

• 2.5% buyback proposed
• Vote due on April 7
• Share swap offered

Abu Dhabi petrochemicals company Borouge will seek shareholder approval to buy back up to 2.5 percent of its shares, it said on Monday, after its share price plunged on this month’s news of its merger deal with Austria’s Borealis. 

Borouge’s majority shareholder Abu Dhabi National Oil Company (Adnoc) and Austria’s OMV said they had agreed to merge polyolfein businesses Borouge and Borealis to create a chemicals powerhouse with a $60 billion enterprise value.

Borouge’s shares slid to close at a record low of 2.3 dirhams ($0.6263) per share on March 11 from 2.66 dirhams on March 4, which was their highest since September 2023. The shares were up 4.7 percent at 2.46 dirhams by 0900 GMT on Monday.

“The proposed share buyback underscores the company’s confidence in its long-term growth prospects and commitment to delivering superior returns to its shareholders through multiple avenues,” Borouge said in a statement.

Borouge is 54 percent owned by Adnoc and 36 percent by Borealis, which in turn is owned 75 percent by OMV and 25 percent by Adnoc. The remaining 10 percent of Borouge is floated on the Abu Dhabi Securities Exchange (ADX).

• Adnoc targets foreign listing of investment arm XRG
• Adnoc targets Mubadala’s energy assets
• Adnoc signs $340m AI contract with Abu Dhabi’s AIQ

Shareholders will vote on the buyback at an annual general meeting on April 7. They will also vote on dividends that are proposed at $1.3 billion for 2024. Borouge made a net profit of $1.24 billion last year.

The proposed buyback would be conducted via open market transactions on ADX. The size depends on market conditions and other factors, with 2.5 percent as a ceiling.

Current Borouge shareholders are expected to be offered an exchange of their shares for stock in the merged entity, Borouge Group International, after the merger deal closes.