Abu Dhabi National Oil Company and Austria’s OMV will merge their polyolefin businesses to create a $60 billion chemicals powerhouse, the companies said, as the Gulf state oil firm advances its aggressive growth strategy.
The merged entity, Borouge Group International, will combine two joint ventures: Borealis, 75% owned by OMV and 25% by ADNOC, and Borouge, 54% owned by ADNOC and 36% by Borealis.
It will also acquire Canada’s Nova Chemicals Corp from Abu Dhabi sovereign wealth fund Mubadala for $13.4 billion, including debt, as part of its strategy to expand in North America, the companies said in separate statements on Monday and Tuesday.
“These transformative transactions mark a pivotal milestone in ADNOC’s global chemicals strategy as we deliver on our international growth mandate,” ADNOC Group Chief Executive Sultan Al Jaber said in a statement.
The deal, subject to regulatory approvals, marks the conclusion of nearly two years of negotiations, during which key issues such as the listing venue, shareholding split and headquarters location become sticking points.
“When combined, the three highly complementary world-class businesses will create the fourth-largest global polyolefin group,” OMV said in its statement.
As part of the deal, OMV will inject 1.6 billion euros ($1.68 billion) in cash into the new company, which will be listed on the Abu Dhabi Securities Exchange, with a dual listing on the Vienna Stock Exchange expected later.
The injection, which will be adjusted by dividends paid out until completion, will equalize ADNOC and OMV’s shareholding. Both will own nearly 47% of the new entity, with the remaining stake available as free float.
The new company will be headquartered in Austria, and have a two-tier board structure with equal governance and voting rights between OMV and ADNOC.
“Together, OMV and ADNOC will build on a versatile and future-proof product portfolio and pursue significant organic growth opportunities,” OMV Chief Executive Alfred Stern said in a statement.
The merger is expected to close in the first quarter of 2026. Borouge Group International will look to raise up to $4 billion of primary capital in 2026 to be included in the relevant MSCI index, the companies said.
Nova is a polyethylene producer with 2.6 million metric tons of polyethylene capacity and 4.2 million metric tons of ethylene capacity.
The companies expect Borouge Group International to generate annual cost savings of approximately $500 million.
Borouge’s expansion project, Borouge 4, “is expected to be a key growth driver” and will be acquired by the merged entity at cost, estimated to be around $7.5 billion.
Source: Reuters.com